2Bull Forex Blog

Forex trading can be learned by anyone and that’s a fact - yet despite this 95% of traders lose all their money. So what is the trading tip that separates winners from losers - let’s find out.

First let’s start with a rather inspiring story…

In 1983 legendary trader Richard Dennis decided to prove that anyone could learn to trade and that trading was a learned skill. He took a group of traders from all walks of life, of varying educational levels, of all ages and both sexes and in 14 days he taught them to trade - he then gave them trading accounts.

The result they went on to make over $100 million dollars and proved him right.

While Dennis taught them how to trade a method which was simple - so simple anyone could learn it he taught them something more:

He made sure that they understood exactly how the method worked so they could have confidence in it and the discipline to follow it through losing periods to achieve success.

The fact is it is not the method that is the critical element in trading success its holding your discipline when you are confronted with an all powerful force - the markets.

Forex markets move where they want to, are always right and it is only the trader who can be wrong.

This causes most traders huge problems and the main ones are as follows:

1. We all like to be right and the forex markets will make a mug of even the best traders at times.

2. Man is a pack animal and likes the reassurance of his peers and we have done this since stone age times and grouping together in most areas of life and sharing knowledge and skills has seen mankind advance - do it in the markets and you will lose with the majority.

3. We are used to order and rules that we follow and that’s what makes society work but in the markets you have to make your own rules and just as importantly, take responsibility for your actions - again most traders find this hard.

While Dennis taught them a method he taught them to understand themselves, have confidence and discipline and this really is the key to currency trading success.

If you can’t follow your currency trading system - you have no system at all - PERIOD.

To get the mindset to win keep in mind the following as there as an important part of your forex education as learning a trading system.

- Accept responsibility for your actions and understand success is firmly on your shoulders.
- Understand whatever method you use (even if you buy it from someone else) so you have confidence.
- Cheerfully take losses as a consequence of making long term profits.
- Do not take advice from others or believe the news you will be sucked into the pack.

It looks easy to learn forex trading and it is but that doesn’t mean you are going to win - as we have said it’s a purely learned skill - but you need something extra to enjoy success and that comes from inner understanding which leads to confidence and discipline.

You may not become as rich as the traders Dennis taught - but if you understand that forex trading is not easy ( and you wouldn’t expect it to be with the rewards on offer ) you can use this forex trading tip to build a forex trading strategy for long term success.

All you need to do is work smart and absorb the trading tip and use it.

Forex technical analysis is the most effective and most time efficient way to make money in forex and studying forex charts can lead you to success but you need to know some basics avoid common forex myths and do it correctly and that’s what this article is all about.

Let’s look at some key points to consider when getting your forex trading strategy together and suing forex technical analysis.

History Repeats Itself

Human psychology is constant and forex chart patterns repeat themselves over time but you need to understand one key point - they don’t do so with scientific accuracy.

There is a huge market for courses who say they can but they can’t - so don’t fall for this myth. Forex trading is a game of odds not certainties.

If you can learn to trade the odds, you can have more winners than losers, execute your trading system at the right time and enjoy currency trading success.

Forex charts also make studying the news irrelevant.

Many traders simply believe newswires and brokers and the arguments and opinions are convincing but that’s all they are - opinions and there more often than not wrong.

Trading the Reality

While the fundamentals are important, it’s very hard to judge their impact and how the participants view them. Forex technical analysis simply assumes that all fundamentals will show up quickly in price action.

The forex chartist therefore doesn’t concern himself with why prices are moving - he simply trades the reality of price change and wants to make profits by locking into and holding trends when they occur.

Keep It Simple

The best forex trading systems are simple and easy to understand.

A complicated trading system is unlikely to be successful.

Why?

Because if you make it to simple there will be too many elements to break.

Be Objective

Ignore subjective tools and make your system rule based this means that you will stay objective and hold your discipline. Most people don’t fail in forex trading because they have poor methods - they fail because they have poor discipline.

If you don’t have the discipline to follow your system you have no system - period.

The basis of any good forex technical trading system is built on the following

1. Using support and resistance

This lines up areas that are important in terms of the market and you can look for them either to hold or break.

2. Confirmation

You cannot predict if levels will hold or break so don’t try.

You need to get confirmation that they do by a clear break or an indication of a change in price direction away from the level in the opposite direction to show they hold.

For this you need to learn to use confirming leading indicators - we don’t have time to go through them here, simply look up momentum oscillators in our other articles.

3. Money management

All systems need robust money management and this is not simply placing a stop - it also involves knowing when to trail it, lock in profits and also take into account the overall account equity and its protection.

FINALLY

Forex charting is a great way to make money, enjoy currency trading success and you should essentially think of yourself as a ships captain.

Just as the ships captain uses charts to get from A to B, steer a perilous ocean and make a living you can to use them the correct way and you can make big forex profits - use them the wrong way and you will drown, its as simple as that.

Forex technical analysis used the right way can give you a life changing income in around 30 minutes a day. you can learn the basics in a few weeks so get studying and make technical analysis part of your forex education.