If you have been involved with forex trading, I’m sure you probably have seen one countless forex trading system after another. Most of them dealing with generic indicators like Stochastics, MACD, Moving averages, etc. It’s important, as a trader, that you learn to think outside the box. So let’s do that, shall we? You can start by learning concepts like price action, but getting rid of your indicators.

If you are the kind of trader who has been addicted to using indicators, this may seem a bit strange. But I think that its important for a trader get a little out of your comfort zone.

Don’t cheat. Remove ALL of your indicators. Don’t say “Oh I need to keep this one”. There shouldn’t be a single indicator showing on your chart. You should be seeing a simple bar chart or candlestick chart.

The next step is real simple. You just watch the market move in real time. This can be done on either a small time frame or a larger time frame.

What you should start to notice (obviously, not instantaneously) is that when prices go up and down, they create patterns. If you notice those patterns, then you can notice that they represent inherent support and resistance areas. This is something that you just can’t find with indicators.

This is something that you have to see with your own eyes. You’ll also begin to see that the more volatile the price, the easier it becomes for you to notice those strong support and resistance lines.

If there is one thing that has caught like wildfire within the forex trading community, it would have to be forex robots. So many traders want to know if it’s realistic to expect a trader to make money trading them? My answer to that is NO, and all you have to do is look at any forex forum for further proof.

It’s obvious that many traders act as if robots are really like the holy grail. I completely understand why they would want to believe this. I mean, after all, I would love to spend my time surfing, while my robot is busy making me millions of dollars. Who wouldn’t LOVE that? It’s a dream come true.

The main problem though, is that its just not realistic. You have to understand that the forex market is a living, breathing thing. It’s just not that programmable. There is as much art as there is science, when it comes to trading. Every new day on the market, there is always something that is happening. You have to be there to roll with the punches. It just can’t be outsourced to your trading robot.

Think about how much financial, political, and economic news comes out in a day. You have to know that any kind of unexpected news can, and will, have an affect on a currency. Do you really think a trading robot, is going to be able to grasp the information that comes out and be able to trade it properly? After all, most humans have a hard enough time handling news.

I think someone should be telling the truth about forex trading robots. If you have been a part of forex trading, I’m sure you have heard countless things about these automated trading robots. You’re probably amazed at what they can do.

You’ve probably heard trading robots being heralded as….wait for it……”the holy grail”. I can definitely understand why traders would feel this way. I mean, it’s amazing isn’t? You have a piece of software that does all the heavy lifting and trades for you. Who in the world wouldn’t like that? Well….with all of that fanfare, have you found too many people who are making a living using this “holy grail”?.

The thing is that the markets are just not “programmable”. When you wake up every day the markets give you something new to look at. They are not meant to be traded blindly on autopilot? When it comes to trading, traders need to use some of their own intuition.

Just think about how much important financial news that comes out every single day. Is it realistic to just let a robot interpret the market when the Fed raises interest rates or when Non-Farm Payroll numbers come out?

I know traders love the idea of forex trading robots because it alleviates some of the pressure of trading. All the pressure of success or failure is squarely on the robot. It’s a nice idea. It’s just not a realistic one. As a trader, you’ve got to roll up your sleeves and get your hands dirty.

If you are completely brand new to trading the forex market, you have to be prepared for some of the intricacies of what currency trading is all about.

For starters, if you have only traded the stock market, then you should really get used to the idea of a 24 hour market. This is something that a lot of traders just simply can’t get used to. With the stock market closing at 4 pm EST, every day, stock traders can just relax. With forex, you are going to have to keep an eye out on the market all the time.

Another thing that you are going to have to get used to is the fact that the forex market is much more news driven than any other market. If the Federal Chairman blinks too much, a currency can rise or fall in the blink of an eye.

But the main thing that I love about the forex market, above any other market is from its technical aspects. The price patterns are much more recognizable than the other markets.

When I say this, I mean when you are looking at a simple price chart on a currency pair, you notice that price patterns can be use used naturally to predict the future price movement. There is no market that has such connecting patterns.

And, of course the great thing about the forex market is the sheer amount of currency pairs from which you get to choose from. So you can always find something to trade. And, since the forex market is open 24 hours a day, it’s a perfect fit for anybody that has a day job. They can always find time to trade it.

I don’t think any forex trading introduction can be complete without talking about why so many people fail at forex trading. After all, a great way to learn trading is to avoid making the same mistakes that others. As of right now, over 95% of forex traders are losing money. Let’s look at some of the many reasons as to why that’s the case.

First off, you have to look at the unrealistic expectations that some traders have. You’ve got traders who feel like forex trading is a get rich quick scheme. IT’S NOT. Far from it. So, if you’re just starting out trading, and you think you are going to be living in a mansion on a beach in Hawaii after your first month of trading. Let me be the first to tell you that is not going to happen. It doesn’t mean it can’t even happen. Just be realistic.

Another obstacle that many traders face is that they just can’t handle their emotions when they are in a trade. Anxiety and panic starts to get to them, and they have a hard time looking at the market with a relaxed frame of mind (which is something you need).

Also, don’t trade with money that you can’t afford to lose. I know this may sound like common sense but you should know that there are many traders who are trading WAY beyond their means, as you read this. Not only is it dangerous, but you are not going to be trading very accurately, because you KNOW you can’t afford to lose. You don’t think that’s going to put pressure on yourself, and affect your trading, negatively?

Most importantly, take the time to understand what the market is telling you. I don’t mean slapping on stochastics indicators and buying and selling when the market is overbought or oversold. That’s not what I am talking about. Anybody could do that, and you can see how most people trade (95% are losing money, remember). Think about how the professionals trade. There has to be some analysis being done. You can’t just trade like a robot would.

I’m sure if you have been around forex trading for even the slightest bit of time, you’ve probably been on the Forex Factory forums. Needless to say, they are the most popular on the internet. They are run extremely well and there are countless threads that you can read. If i could offer some advice, I would recommend that you don’t overdo it. What I mean by this is that you don’t spend hours a day on it.

When I was a newbie, I must have visited every single forex forum on the internet. You know what it gave me? A headache. How could it not??

Each day, you are listening to people tell you that they discovered “The Holy Grail” over and over again. You keep trying all the gimmicky systems that are talked about on the threads, yet you don’t see any success. There’s a couple of reasons for that. First off, there is no such thing as “The Holy Grail”. Second of all, most of these systems that are being discussed on the forums are usually systems that are way too reliant on indicators.

Indicators are inherently lagging. If you want to find out what has already happened in the market, you follow indicators. If you want to find out what will happen, you learn how to interpret price action.

I don’t want to sound as if I am insulting the forums on Forex Factory (or any other site for that matter). I’ve just seen first hand how it can make traders too apathetic.

It is well known in the currency trading world that the trend is your friend and any forex trading strategy, like those in the Forex Income Engine 2.0 Course, based around following a trend is likely to be both simple and effective.

It is very easy to create trend lines on any forex chart, but most people prefer to use candlestick charts for this because the candlesticks are such a clear visual signal. When trend lines are forming, you can use them as a signal to buy or sell the currency pair. The first step in using trend lines for a forex trading strategy is to determine whether the market is rising, falling or is stable within certain parameters. Of course there will always be fluctuations, but at certain times you will see clear patterns.

1. If the price is rising

If the price is going up, first draw a straight line through the highest highs on the chart. This line will be sloping upward. Then draw another line through the lowest lows on the chart. If this line is also going upward and is approximately parallel to the first, you have an upward trend.

You can then use these two lines as support and resistance lines. This means that you can assume that while the trend continues, the price will remain in the area between these two lines. Therefore, any time that the price hits the top line you could sell, on the assumption that it will fall back. In a sense this strategy means going against the trend, but you would only hold that position for a short time.

Alternatively, any time that the price hits the bottom line you could buy, on the assumption that it will soon rise again. In this case you are following the trend which is often a better strategy. However, you must keep in mind that there will at some point be a true reversal and you may be caught out by this.

2. If the price is falling

If the price is going down, you can follow a similar method to the previous system. The lines you draw will be going downward but you would still buy when the price hits the lower line and sell when it hits the upper line.

3. If the price is stable

If the price is really not going anywhere, then the lines that you draw through the highest highs and the lowest lows will either be horizontal and parallel to each other, or they will be converging (drawing closer together) or diverging (drawing apart). If they are horizontal, you could use them as support and resistance lines in the same way. If they are diverging, it is not a good time to trade. Wait for a trend to form.

If the lines are converging, they may indicate a breakout. In this case you should not treat the lines as support and resistance lines but wait for the price to go beyond either one of them and continue in that direction. So if the price breaks above the upper line you would buy, expecting it to continue in that direction for a while. Equally, if the price breaks above the lower line, you would sell.

Like all forex strategies, these are not guaranteed. There is always a risk of trades going against you, so you should check your signals against other indicators and always use stop losses. Always test your system in a demo account before going live. These steps will help you to develop a successful forex trading strategy.

The facts are clear: most Forex traders lose money. Only about 10% of traders manage to create a long term and continuous income from their efforts. The rest simply end up poorer than they were when they got started.

How can you avoid this fate and make sure your Forex trading experience is a good one?

Here are 6 reasons why traders lose money:

1. Using complex systems - Some traders believe that if a trading system is simple than it must be inadequate. They choose complex systems which are so hard to operate that they never fully grasp them. Choose a program which is simple to operate. It’s the key to making the right decisions.

2. Can’t control emotions - Trading is an emotionally turbulent experience. Watching the market turn against you is always stressful. The problem is that many traders can’t control their emotions and allow them to influence their decisions. They end up making silly mistakes.

3. Long learning curve - Many traders choose systems which take forever to learn. Again, this has to do with the complexity issue. Wasting time is also wasting money. In addition, the longer you need to spend learning something, the more things you forget about it. This leads to bad decisions and wasted money.

4. Poor money management - Trading the Forex market isn’t about one single trade. It’s about a whole strategy of trading and investment which requires you to strategize. You need to fit your trades to your current financial status and level of knowledge. Otherwise, one trade can wipe out your account without warning.

5. Relying too much on software - There is no harm in using automatic trading systems. Some are pretty good. However, not knowing how to trade yourself means that you are forever dependent on some program. The way to achieve a long term Forex trading success is through true knowledge and hands on experience. Software programs can make you a lot of money, but make sure to get a Forex education too.

6. Not trading with Stop Loss and Take Profit prices - This is a huge mistake which many traders do. You need to always have a target price in which you get out of the market and take the profit that you’ve earned. You also need to set a Stop Loss price in case the trade went against you. This is part of money management and is a crucial step to stop losing money on Forex.

Avoid these mistakes and you’ll have more success

Forex trading has become widely popular despite the dismal statistics that over 90% of traders lose money. The prospect of taking a piece of the 3 trillion dollar daily pie which the foreign exchange market sees is strong and tempting. Yet the risks are also tremendous, as the statistics show.

The sad truth is that most traders fail to truly make their trading a business because they don’t apply basic Forex risk management principles. This is what truly separates the men from the boys in Forex and can have a huge effect on your long term results.

Here are 6 tips on Forex risk management, minimizing Forex losses and risk factors

1. Don’t put all of your eggs in one basket - This is true for any investment and Forex is no exception. Forex investment should only be part of your portfolio, not all of it. Another way to achieve diversification is to trade in more than a single currency pair.

2. Don’t over-leverage yourself - It’s easy and tempting to leverage yourself a 100 times over. It also makes it pretty easy to lose your shirt. Don’t take huge leverages. It’s easy to lose all of your deposit that way in just one quick fluctuation of the market.

3. The Stop Loss is sacred - Trading without a stop loss is like jumping out of a plane without a parachute. You’re going to get splattered and it’s going to be ugly. Also, once you set a Stop Loss, you never take it down. Otherwise, it’s like jumping with a parachute but never intending to open it.

4. The trend is your friend - Unless you’re a position trader and you plan to hold a position for years based on in depth economical analysis, you shouldn’t go against the trend. Remember, there are stronger players in the market. You’re not going to wrestle the market to the floor. What would you rather do, swim with the current or paddle in the opposite direction?

5. Educate yourself continuously - The best way to know Forex risk management rules and become a successful forex trader is to know how the market works. This is an ongoing thing, so keep at it.

6. Use software to help you - To achieve Forex success, make use of trading software and analysis programs which can help you make a better decision. These systems aren’t perfect, but you can still use them as advisors and something to fall back on.

Use these 6 tips and you’ll minimize your risk and become a more sensible, successful trader.

Financial magazines and websites are full of Forex news and updates. You can also find tons of Forex tips from these sources or even from people on the street. Everyone seems to be an expert. The truth is that most of these people are far from experts in forex trading. In fact, some of them are totally ignorant of the true nature of the market and how it works.

That’s the main reason why it’s dangerous to follow Forex market news blindly. A lot of these news items and analysis articles are just the opinion of a single person and one who may have theoretical background but little to no real knowledge of the market.

The second danger in following Forex news is that it usually arrives too late for you to really take advantage of it. By the time something reaches a newspaper, it has already been read by thousands of professional traders in banks and financial institutions. They always get the news first. While you’re reading an article, so are thousands of other traders. This means that everyone is influenced in the same way. You don’t have an advantage, you’re part of a flock that’s being driven.

Of course, being aware of what’s going on is important, and knowing the news can lead to more profits, but be aware that Forex trading news items aren’t that effective. In fact, because you will usually not be among the first to read the news, you may even be too late in making a profit and catch the market while it’s going in the wrong way.

As for trading by Forex tips, always question the source of the information. Even if this person has an MBA, does he or she really know anything about Forex?

I’ve seen too many traders fall victim to useless Forex trading tips. You need to develop a healthy sense of skepticism. You also need to educate yourself on the market. In that way, you’ll be able to tell the useful news from the useless and the true tips from the false.