2Bull Forex Blog

Forex trading price action – how and why do prices move? You may think the answer is obvious but its not if it was 95% of forex traders wouldn’t lose their money. Most trades simply have no idea how and why prices move -if you do you can become a winner at forex trading.

Let’s start with a simple equation which causes forex price action:

Fundamentals (Supply and Demand) =Human Perception of Them = Price

Now that might seem simple – but most traders don’t understand its significance or its true meaning and make these assumptions that see them lose:

- You can day trade markets
- You can predict price action
- Forex markets move to a scientific theory
- You can trade the fundamentals and win

If believe any of the above you are going to lose lets look at why, how to avoid the traps and get a forex trading strategy for profits.

- You can Day Trade and Win

No you can’t – it’s obvious that with millions of humans looking at the facts you cannot judge what this vast mass will do in a few hours – all short term volatility is random.

- You Can Predict Price Action

Prediction is another word for hoping and guessing and that won’t get you far in life let alone forex trading.

- Forex markets move To a Scientific Theory

This really leads on from the above and there is no scientific formula – if there were we would all know the price in advance and there would be no market!

- You Can Trade The Fundamentals and Win

It’s not the fundamentals that are important its how there perceived that determines the price. We all have the same facts to look at but all draw different conclusions from what we see. So just looking at the fundamentals on there own is a losing game.

The Best Forex Trading Strategy to Win!

The best way to win at forex trading is simply to forget predicting and trying to follow the forex fundamentals and follow forex charts. Why?

The reasons are simple and compelling:

- We all know the news in a split second so all technical analysis does is assume that fundamentals will quickly show up in price action so you don’t need to worry about them. Your real aim is to see how investors perceive them and this is shown clearly on the chart, no hoping or guessing, you act on the reality of what you see.

- Human psychology may not be predictable with human accuracy – but it is constant. This means that it repeats itself and this can be seen in high odds chart set ups which can be traded for profit.

You are not bothered about how prices move or why, you just want to profit when they do.

On a forex chart, you are seeing the reality of price change and can execute your trading signal based upon what you see.

With a bit of practice, you will soon be spotting and locking into long term trends and if you have learned the right forex education, you could soon be making big forex profits in around 30 minutes a day.

Perhaps no other business offers you so much profit potential for the time you put in, if you have the right mindset and practice your art, you could soon be piling up some big FX profits providing you know and can act on forex trading price action.

Forex trading robots are exactly as they sound automatic forex trading systems where all you do is follow the software and execute your trading signal in line with the signals it gives – but how do you find one for big long term profits – lets find out…

There are huge numbers of them sold on the net and 99% are junk and will wipe your equity out – the reason? They have never actually been traded in real time and normally carry the disclaimer below or similar, read it and you will see why you will lose:

“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown“.

You can see the problem already – the track record is simply made up; you can make up anything in hindsight and the vendors who sell these do!

Lets face it making money in hindsight is easy and you will see massive gains from these forex robots on paper but you wont see them in the market, you will get wiped out.

Are there are good ones?

I have found a few but they always have real track records and are independently tracked of course, they don’t guarantee you will make money but if you are like me, you like to see some evidence that a trading system has been proven in the market.

Ask yourself a question:

Would you take golf lessons off someone who had never played? Of course you wouldn’t and it’s the same with buying a forex trading robot.

Never trust any track record that carries simulated disclaimer look for real time track records but you generally have to look quite hard to find one!

Here’s a FREE Robot that will work!

If you look up our other articles you can read about “Richard Donchian’s 4 Week rule” Now this can be put in any charting package or you can do it on paper, its one rule, its simple to understand, robust, generates automatic trading signals and has been used by some of the top traders of all time and it’s free.

Longer term it will beat 99% of the forex robots sold which have simulated track records so, look it up and see for yourself – You need discipline to follow it but it works.

The rise of online forex trading has seen the rise of the “free lunch” automatic forex robot and while they existed before online trading – marketing companies saw an opportunity to make money:

Create some good sales copy, make up a track record and appeal to naïve or greedy traders. It’s a great deal guaranteed profit for selling the system and what the heck the trader can take the loss.

Steer clear of forex trading robots UNLESS They have a real time audited track record and even better why not make your own free one, based upon the one we outlined earlier? It’s a very profitable free forex robot.