BRichard

Many years ago an old market adage implored "never buck a trend." This means if the market trend is up you should never make trades that sell this market short. Of course, this also means if a market is in a downward trend you should never buy until it has bottomed out. They used to say that buying into a market when it is falling is like sticking your hand out to catch falling steak knives. This is a gruesome thought but then again, trading the Forex can end up giving you gruesome results.

Price Action Forex Trading is the trading of the Forex markets using an approach based on price itself. The price is the most important information on the chart, and this type of trading approach takes advantage of repeating patterns in the Forex markets. It is the visual representation of the price of a specific market, normally over a specified period of time. It is the most important part of any chart, as it is contains the most recent and relevant price data.

When using common trading platforms one of the main indicator options is the Oscillator. Oscillators are objects that mark two points and move back and forth between those points . When the oscillator reaches an extreme area within this 2-point range, buy and sell signals are generated. When seen near the midpoint of this range, the signal is neutral and no trade should be taken. Common examples of indicators include the Relative Strength Index (RSI), Stochastics, or Parabolic SAR. All these indicators help traders identify reversal spaces, as the prior trend reaches completion and prices are preparing to make a forceful move in the opposite direction....Totally agree

Another question that many ask is..what is Forex Leverage?

Professional training and learning a specific methodology comes in handy to perfect your trading. A methodology is a rule-based trading application that teaches the Forex trader how to identify the most frequently occurring technical price pattern and, more importantly, the pattern with the highest probability to achieve the intended profit objective.

The basis behind using technical analysis is to find trends when looking at the Forex charts and be aware of when they first develop so you can ride the trend until it ends. The foreign exchange market is a very strong trending market, lots of ups and downs in short periods of time and therefore you should perfect the art of technical analysis to sail through the rough tides while trading in currencies.

I would also say Lack of a Trading Plan and Market Forces Real-life Forex trading is much different to demo trading or any other simulated programs. It will be a whole lot different scenario, when real-money is involved. Knowledge of Forex market forces, currency pairs and their relationship to other currencies, nations and their policies, and major fundamental and technical indicators are important prerequisites for a sound trading plan. Many new Forex traders do not have any plan at all for placing stop-losses and orders; in fact many of them entirely rely on the automated procedures of their trading software.

I believe Hoping for Big Successes also contributes a great deal....Keeping very high expectations from forex market and the urge to become a millionaire overnight can hurt the traders' future than most things. Big successes need big position size of trades and/or very high leverage and/or high risk trades of not so liquid currency pairs and/or very complex trading strategies that involve many currency pairs or derivatives. Actually this greed can lead traders to a state of gambling. Betting for unrealistic gains and forgetting the risk-tolerance levels and lack of patients can quickly make your investments disappear.

Taking trades come naturally and you are able to get in and out at the precise price levels based on tape. Instead of having the markets take your stop out, you exit when you know you are wrong. You keep your head high but remain humble on the inside. You have now officially graduated the school of the hard knocks.,,,,I couldnt agree more. You have hit the nail on the head. Awesome research done there making it a great read.

A rule of thumb in the Forex market is that before entering any trade based on a given pattern, the occurrence of the pattern has to be established to avoid using inappropriate trading strategies. When you achieve this you will be at a vantage point to win the trade than to lose it.

You should never risk all you have since you will have to lose some eventually but to make higher profits you need to risk as much....... ......the slogan that you should only invest the much that you willing to lose holds water in this aspect,,,you should not empty your bank to invest thinking that you will win in your trading. In Forex trading there is no 100% guarantee, it is all about risking but you should take all the necessary measures to mitigate the losses that you can incur....

Very informative post.

Thank you Richard for the awesome article

Kindly expound how "Volume can also be used to determine chart patterns"