There are only a very few things that are effective in getting you profitable in Forex, so to try and save you wasting your time on the multitude of useless tools and information hopefully we can have a discussion about the stuff you should be using.
I won’t discuss rubbish on this thread I will simply state that rubbish is rubbish, where I come from we call a spade a spade.
What doesn’t work…
First of all though let me just state that indicators are a waste of time, however there is a kind of exception to this which are ‘indicators’ that provide you with more information that you have on the chart e.g. volumes.
Fibs - DON’T work, you will come across these in Forex trading time and time again, they will send you on wild goose chases and round and round in circles and totally waste your time, they are very prevalent, yes fibs are commonplace, Oh just in case, I will clarify that in this case by Fibs, I mean lies.
Now - What DOES WORK…
Well, simple but effective - fast price action trading as in my cat and mouse strategy, where you just concentrate hard and when you see some solid consistent momentum you jump on a trade and exit before it stops, I think this is actually possible on the EURUSD just by looking at the chart concentrating really hard and learning to decipher between the solid moves and the jumpy ones, but with a combination of ‘correlating’ currencies it makes it easier, but essentially this is a Marmite system, you love it or loathe it, but it got me profitable while I really learned how the market works.
Patterns work - looking out for different patterns work, they give you clues as to whether the market will continue the trend or reverse, but they are vague patterns, not precise, you will need to use your discretion and timing, but the clearer the pattern the stranger the setup will be. When there are no clear patterns, the market is likely to be ranging, so trade accordingly.
Support and Resistance - This is a great tool, but you have to combine it with other ‘stuff’, it just doesn’t work on it’s own, you have to have clues as to whether the support will hold or break, you could say that Support and resistance needs support.
Fibonacci - Very effective, easy to earn, combine with S/R, and don’t use it on small moves, always look for an obvious move before plotting Fibonacci.
Trend Trading - This is when your trading becomes one whole of a lot easier, S/R points are more obvious, stops can be tighter, profits are easier to come by. But when is the market trending - just look at it, if it looks like it’s heading in a direction it’s trending, no indicator in the world will beat your eyes at this. Pattern recognition is one of the most high tech problems that exist, the cutting edge of technology is only just beginning to recognize patterns and objects.
Look out for market nuances, the old big number stuff, if the market is heading up for 1.2750, it will just pop up past it before retracing, I won’t go into details here but it’s due to supply and demand (if you insist you can call it stop hunting, but not in the way that most think of stop hunting)
When you are doing your analysis and you find it hard and can’t work out what’s going on, it does usually mean that the market is unpredictable, or at least you are unable to predict it, so if this is the case, stay out - If in doubt stay out.
Patience - essential tool, you have to be patient, there will be days when the market can be totally untradeable, leave it alone and wait for the day where it’s easier, make trading easy for yourself, start with trading the things you completely understand.
With commitment, determination, discipline, optimism and a sense of humour you will succeed.
You will see quoted ‘95% of trader fail’, an interesting discussion in itself maybe, but the only thing you should care about is that you are going to succeed.
Take on board these few simple things, don’t deviate and you may well get there in a little more time than you think rather than a heck of a lot more time than you think.
