We all know the statistics. 95% of the people that try to trade forex, fail. Is trading forex successfully really that difficult? Well, it is if you are doing what 95% of failed traders do. The majority of the people that start in forex usually do so because they see some kind of trading system that is drenched with indicators like stochastics, RSI, and any number of the countless lagging indicators that the trading software uses. The question remains how do you know what the market is doing if you are busy looking at the indicators?
Indicators serve the sole purpose of taking the price action of a currency, stock, derivative, etc.... and putting it through some kind of magical formula so it can be interpreted into something else. Instead of using an interpreter to read the market, traders should actually be the interpreter. If you watch many of the traders that trade for themselves on the New York Stock Exchange, you'll notice that many of them aren't very worried about where the stochastic is before they make a trade. They don't do that because all they really care about is where the price is.
Being able to trade using solely price action is an important step in trading forex successfully. If a currency goes up or down 100 pips within an 1hr. A trader should be able to understand why that happened and most importantly be able to take advantage of it. When properly trained, a person looking at a naked (no indicators) chart should be able to see the market in all its glory. All the information is right in front of them. The human mind is an infinitely better indicator than any moving average or RSI.
Make sure to check out my squidoo lens on how I learned to start trading forex successfully.
Article Source: http://EzineArticles.com/?expert=Jon_Ferraro
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