Monday, March 16, 2009

Making Money Trading Forex - How to Really Understand Trading

There are several ways of making money trading forex. You can make money by trading breakouts, scalping, swing trading, hedge trading and countless others. There are also different ways on how to do this. The majority like to use indicators like Stochastics to guide them when to open and close a trade. This is also the reason why 95% of people fail to make money trading forex.

It's not that there aren't people that are having success trading Stochastics, but the majority fail. There is a very good reason for this. Nobody has a clue what Stochastics has to do with the actual price action of currencies. Sure, anybody can follow "the rules" of trading Stochastics, but if you want to be part of the 5% of traders who are having success with forex, then you need to dig a little deeper.

If you can understand price movement, you can understand trading forex. The charts don't lie, even though some of the indicators might. With price action you can spot support and resistance points, (the real ones, not the indicator ones) breakout points, time targets, and so much more.

It may seem complicated but it's really not. It's all a question of price patterns. Every currency in the forex market has specific price patterns that can be used to forecast the future price. This is what is meant by understanding the market, and this is how the pros use the knowledge of price to make money trading forex. Stochastics or any other lagging indicators will not going to give you that kind of insight.

Jim Buhs has been a successful forex trader after learning how to trade price action. Once he understood that all he needed to trade forex successfully was on a plain chart with no indicators, his profits soared.

To see my unbiased forex system reviews, make sure to go to LearnForexDirectory.com

An American International Group office building is shown in this Tuesday, Sept. 16, 2008 file photo taken in New York. American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars. The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. A white paper prepared by the company says that AIG is contractually obligated to pay a total of about $165 million of previously awarded 'retention pay' to employees in this unit by Sunday, March 15. (AP Photo/Mark Lennihan, File)Reuters - Goldman Sachs Group Inc and a parade of European banks were the major beneficiaries of $93 billion in payments from AIG -- more than half of the U.S. taxpayer money spent to rescue the massive insurer.

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