Determining Forex Prices - Assumptions Traders Make About Why Price Move Which Causes Losses

If you want to win you need to know how and why Forex prices move and while this may sound obvious Forex advice, most traders have no idea of how and why prices really move and lose. Let's look at some common errors traders make which cause losses.

Forex Markets Cannot be Predicted in Advance

The first major assumption traders make which is wrong, is that Forex prices can be predicted in advance and of course they can't. If you try and predict you will end up with predictions which are as accurate as your horoscope. Forex prices move to the odds and not certainties and in this type of market, you don't predict you simply trade the reality of price action. In an odds based market the following also applies:

Simple Systems Beat Complex Ones

Simple systems are simply more robust, with fewer elements to break than complex ones. Traders continually think up clever ,complex systems and they lose, don't make Forex trading more complex than it really is. You don't get rewarded for being clever or complex just for being right and that means keeping it simple at all times!

Forex Markets Respond to News

This is totally wrong but traders till take predictions from CNN, CNBC and other news sources and lose. The fact is it's traders view of the news that moves prices,NOT the news itself and that's why prices collapse when prices are most bullish and rally when there most bearish. The news reflects the majority view and the majority losses! Don't try and follow experts in the news, simply trade the reality of price action on a chart.

You can make Money Trading in short Periods

Day traders think they can predict Forex prices in a few hours or even minutes but it's a proven fact, that all short term price movements are random and you cannot predict what millions upon millions of traders will do, in short time periods. If you want the odds on your side, you need to trade longer term.

Assumptions on Price Movement to Put in Your Forex Strategy to Win

To Win at Currency trading, see Forex markets for what they really are:

A market of odds, where simple systems make money trading longer term time frames; if you use a system based upon these assumptions, you can make huge gains and at all cost avoid the 4 losing assumptions we have given you in this article.

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