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Sacha Tarkovsky asked:


Forex markets are exciting and with the rise of the Internet, we’ve seen a huge rise in the amount of news available all at the click of a mouse.

However, despite all the advances in communications – and the quantity of news available, the ratio of winners to losers remains the same in the Forex markets:

90% of traders lose money, which may seem a starting fact as more information is seen by many as a key to success

Online currency traders think the news helps them – however, in most cases the news ensures they lose money – for the following reasons:

1. News is discounted by the forex markets in seconds.

All the news is discounted by the markets quickly, in today’s world of instant communications.

If you want to trade profitably, then you need to simply ignore the news.

Markets move on how investors perceive the future and for this you need to study human nature or trader psychology.

Technical analysis is the way to do this; a simple equation will make this clearer:

Supply and demand (Fundamentals) + Investor Perception (human perception) = Price

Humans decide the value of any investment market and that includes currencies.

By studying forex charts, you are seeing the complete picture – and keep in mind investor psychology is constant and shows up in repetitive price trends that you can profit from.

2. They’re stories that’s all

When trading forex markets, online currency news is convincing, but their stories and they won’t help you make money.

The financial writers are knowledgeable and of course they can explain everything in hindsight – but they’re not traders.

If you listened to the news, you could have bought at the top of the market in 1987 – and the tech bubble of the 1990’s.

All the news claimed the market would go on forever, but what happened next? Prices dropped like a stone causing huge losses.

Any market is most bullish at market tops, and most bearish at market bottoms, so listening to currency news will simply damage your online currency trading success.

3. Financial news and emotions

The biggest mistake any FX trader can make is letting his emotions dictate his trading.

If you want to win, then you need to remain disciplined with the execution of your forex trading strategy.

It makes us feel comfortable to go with the news and the consensus opinion but in trading, this is a bad trait to have.

If you feel comfortable, you will not make money.

In trading, you need to stay disciplined and isolated.

Remember, the majority of traders are wrong! – and they listen to, and trade with the news.

Use a technical system – and try to ignore the news and focus on the reality of price.

In the Forex markets, this will enable you to stay detached, unemotional and disciplined and help you achieve currency-trading success while others fail.



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Sacha Tarkovsky asked:


Many novice traders like to pay attention to the huge amount of online news stories and try and trade off the information contained, however, this is a huge mistake and one that is guaranteed to make you lose.

If you don’t believe the above consider this fact:

The ratio of winners and losers today, is the same as it was 50 years ago.

This is despite the advances in news and distribution and all the other tools that traders have available to them – the ratio has remained the same.

Why?

Because they don’t help you win!

Think about it – if traders made money listening and acting on news stories, then they would all be rich and this is not the case.

Sure, the stories and arguments sound convincing, but that’s all they are opinions and stories and the people giving these stories and opinions are NOT traders.

The market is a discounting mechanism and quickly reflects all news instantly – it’s discounted and the market is looking to the future.

Trade the news and Your Trading The Past.

Also, if you listen to the news you will let your emotions get involved and trade with the herd and this is a bad place to be – most lose!

Keep in mind that the market news is most bullish at market tops, remember 1987 and the tech stock bubble? Well, when they crashed the news was out and out bullish.

The best way to trade is to ignore the news and use a technical approach to trading. By doing this, you will see the reality of price as it is and act on it – this will keep your emotions out of your forex trading.

Will Rogers once said:

“I only believe what I read in the papers”

He was joking of course, but most traders base their forex trading signals on what they have seen in the news and then wonder why they lose.

There is a huge amount of news online, on TV and in the papers, telling you what has happened and for this its very good, however for telling you what is going to happen, it is of no use at all.

So if you want to win in online forex – trading don’t pay attention to the news!



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Jason Fielder asked:


For someone who hasn′t spent a great deal of time trading in the Forex, the charts and all the hundreds of different claims about news breakout systems can be really confusing. Some of the claims can seem outright ridiculous at times.

If profit was guaranteed, why would anyone do or use anything else? With all these systems it’s easy to wonder: is tech trading crap – or do all those charts really mean something?

This question can be even more confusing for some people when they realize there are Forex traders who believe in fundamental analysis of the market, basically looking at the larger economic picture to determine which currencies to bet on and bet against. This is okay as a long run deal, but the Forex is volatile, so it would make sense that there is a quicker way to analyze a constantly moving markets.

So is tech trading crap? The answer is no, though with an asterisk. Good technical trading is necessary to be able to figure out which currencies are overvalued and which are undervalued. Knowing this information will make it much easier to locate where your entries and exits should be, and gives you a much better chance of being profitable with any given currency pair.

On the other hand, tech trading can get into trouble when it only follows charts and ignores the economic reports that come out. If an economic report spells trouble, that currency is going to fall no matter what previous chart analysis said. Without paying attention to the economic reports and other similar indicators, technical analysis falls into pitfalls that can badly hurt your account.

You don’t need an astrologer to read the stars and tell you it’s going to flood. If it gets cloudy and starts to rain, head for the high ground. Yet if you only go with fundamental factors, you can end up taking a huge hit on the Forex before the currency actually rallies – and by that time you might even have your position closed.

Technical analysis is an extremely useful tool – if it wasn’t then nobody would actually use it. That being said, like with so many things, balance comes into play here. If you use technical analysis in a wise balance with fundamental analysis then you can expect the best results and you will end up as a very happy trader!

Remember these tips, and you’re trading in the Forex is much more likely to be successful.



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Sacha Tarkovsky asked:


Can studying the news help you make profits in online FOREX trading? The answer for most traders is a no.

In fact, paying attention to the news in online FOREX Trading will lose money. Why? Read on and let’s find out.

How and why prices move

In online FOREX trading (and any financial market for that matter) prices move based upon the following equation

Supply & demand fundamentals + Trader psychology = Market price

Which is most important? In today’s markets definitely the latter Why?

Quite simply, markets discount fundamentals quickly and with the internet its done in seconds.

In all corners of the globe the internet delivers information quickly and it’s immediately discounted in the market price.

This means traders make opinions on what will happen in the FUTURE and it is their psychology that is the key to future price direction.

Sure, the papers and news wires are great at telling you why things DID happened and their normally wrong about WHAT will happen.

Traders get deluded by the experts in online FOREX trading and fail to see their wrong most of the time.

Will Rogers once said:

“I only believe what I read in the papers”

Now, he was joking, but most traders take news services as gospel.

Reuters and Bloomberg stories agree with them, so they must be right, is the view of most online FOREX traders. Don′t think so, in fact we know so, based upon the facts and the so called experts past performance.

It’s easy to be wise in hindsight, but looking into the future is much more difficult!

They write stories for a living they DONT trade, traders that are interested in making profits should not be following news stories or media hype.

It’s a fact: Most important market tops and bottoms and formed when the news is most bullish or bearish. When the trends change of course, news wires have an explanation but that does not help you trade!

In the 1987 crash they were bullish in the tech stock boom they were bullish and these are just tow examples of media experts being wrong and there are many others.

Understand the past and look to the future

This is the key to successful online FOREX trading. Quite simply the fundamentals are digested in seconds and reflected in the price.

Its trader psychology that’s important as they look at the future and how they determine the supply and demand situation is reflected in price changes.

Human psychology has remained constant over time and thats why many price patterns are so reliable and point to important market tops and bottoms when the market is either very bullish or bearish.

Of course, prices then go the other way! confounding the so called media experts.

Technical analysis of markets

The only way you can win in online FOREX Trading is to use a technical analysis system that focuses on price.

Why use a technical system in online FOREX trading?

There are two main reasons

1. You will not be distracted by media stories and news hype and will keep your emotions in check.

2. If you are involved in online FOREX trading you can look at charts and see long term trends that last for months or years and many of them (in fact most of them!) run against what the papers and the so called experts say!

To be a success in online FOREX trading all you need to do is focus on these trends and forget the news and media, media experts don’t get paid to trade, they get paid to write stories.

Focus on the reality of the price, not the media hype and you can make big profits in online Forex trading.

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