Making the right call of buying or selling a currency and winning; gives you the best feeling of success. In order to be able to accurately predict where the currency is heading, you will need the best forex tools at your dispense. The great thing about these tools is that they can be learned and are free. These tools consist of price action analysis, candlestick reading, and resistance lines. Although, these tools are easy to obtain and free; one does require the skills, experience, and ambitions to become a successful forex trader. In this article, I will describe the tools in more detail and explain how to use them to be become a profitable trader.

1. Price action analysis – Is the study of a currency price. The most important factor of a currency is the price that the buyers or sellers are willing to buy or sell at. There are million of traders making the market and they are going at each other; trying to successfully outweigh the other. To be able to predict the currency price you will need to be watching for important economic news, drawing resistance lines, and understanding the psychology of candlesticks; this will give you a much bigger advantage of making a profit.

2. Candlesticks – Japanese candlesticks are technical analysis of the trader’s psychology. Japanese candlesticks are a tool to be used to show you what the traders are thinking from a perspective of fear (sell) and greed (buy). The value of candlesticks to your forex trading should only be used from a technical point view not fundamental. Learning the candlestick patterns is extremely important to becoming a successful trader.

3. Resistance Lines – Is the point of price that the currency has reached and became a buying or selling point; if touched or broken. The Japanese candlesticks provide you to overall resistance lines that the currency has reached. The resistance line becomes an important psychological point of buying or selling; if touched or broken.

The success formula is… Candlesticks + Resistance Lines = Price Action Analysis

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How to Accurately Predict Intraday Forex Prices – Accurate Forex Formula

As Forex traders, we know how important it is to have a reliable Forex trading system that turns your trades into profits. Most of the expert traders also understand that there is no perfect trading system that would give you a 100% success. The most vital part of Forex trading is to develop the trader psychology, to be able to handle any losing trades. Many traders don’t have the capacity or perseverance to handle losing, so they settle for an automated Forex system. The problem with the automated system that it is simply automated and it’s based on previous “successful” trades.

So you have decided that the way to go with Forex is by using an automated system after many unsuccessful trades. Please don’t spend your hard earned money on a hopeless venture; automated Forex trading systems don’t work. For, the simple reason that an automated system does not take into effect the current market price action, economic news, and resistance lines. The main problem of Forex trading is that many traders are unable to handle the psychology of trading and losing some trades. It does take a lot of effort and experience to overcome the obstacle; I have personally met some traders who have been trading for years and are still trying to overcome these obstacles. I will be straight forward and honest; some traders will take much longer then others to overcome such obstacle because they just don’t have the capacity to handle the pressure. Below, you will find a list of 5 ways to minimize the many obstacles facing the Forex traders of today:

1. Don’t be a Hero – Forex trading is based on millions of traders worldwide pushing the price of a currency up and down. Don’t try to out smart the system because you wouldn’t be able to and that’s a guarantee. Develop an easy simple Forex system to trade with.

2. Don’t use Indicators – Forex indicators make trading look easy but they have been proven again and again to be inconsistent. An indicator causes false hope by giving you couple of wins and then losing everything.

3. Start small – When you start trading Forex don’t use large lots but start with small, 5000 to 10000 lots. This puts less pressure on you and allows you to experience the Forex market.

4. Give it time – You will not succeed in Forex trading within couple of days, weeks, or months. You will have to go through many trial-and-errors. It can take up to 12 to 36 months before becoming a “good trader”.

5. Price Action and Resistance Lines – It gives you the full picture of where the traders are willing to buy or sell a currency.

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Automated Forex Trading System – False Hope of Forex Automated System

Every expert Forex trade agrees that indicators are not perfect and should not be used as a sole signal for a trade. I am an advocate for Forex traders not to use any kind of indicators on there Forex charts. I like to keep my chart simple by reading the candlestick, watching the price action, and drawing resistance lines. There are other traders who swear by the 200 EMA (Exponential Moving Average) indicator. The 200 EMA is an indicator that averages the price of a currency for a period of 200 days and provides you with the overall average. Using the 200 EMA indicator solely will doom you to failure and you must educate yourself more to be a successful trader.

The sole purpose of Forex trading is to earn profit while trading by making the right trade. Planning is very important to be successful; otherwise, you will loose your capital. Although, Forex is a fast moving and risky investment; with the proper education and training it will lead you to success. If you are going to invest in the currency market, you must think about what strategy you are going to be using. Some traders are fundamental and others are technical; if you are using both trading techniques simultaneously it will give you a higher edge of winning.

The 200 EMA indicator used solely for the purpose of trading is extremely dangerous. A Forex trader must understand that the exponential moving average does not take into consideration breaking economic news and current action analysis. The 200 EMA indicator does have an advantage of showing you the trader’s psychology of what they feel the currency price should be but by no means as an indicator for trading Forex. To trade Forex you must have basic knowledge and information on how the market moves, interest in learning, and common-sense. You must develop your own strategy according to current market events, pricing, and resistance.

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200 EMA Forex Strategy – Popular Indicator But a Failure

We would all agree with the unpredictable market of today, it is very important to find a safe environment to invest your money in for short or long term growth. The forex market provides one of the most lucrative advantages for your investment because it’s transparent and liquidated. With that being said, it is also as important to learn how to trade in the forex market because it does require discipline, strategy, and a goal.

All around the world, big corporate banks, small investor firms, and individual traders are trading in the foreign exchange market. Selling and buying one currency against another is known as currency exchange. If you are looking to enter the currency exchange market at the convenience of your home; then you would need to find a forex broker. The basic purpose of forex trading is to make a profit by determining if one currency is going to increase or decrease in value against another currency (example. USD Dollar vs. Japanese Yen, EURO vs. USD Dollar).

It is very important to learn how to invest safely in the forex market because it’s a fast paced market. To invest safely in the forex market, you must first learn how to invest. You must determine if you are going to be a:

(1) Technical or Fundamental trader

Technical traders rely on price action analysis, resistance lines, and charting to determine when to buy or sell a currency. Fundamental traders rely on economic and world events to seek there buy or sell position.

(2) Trading Strategy

One must have a trading strategy to succeed in the forex market. You must ask yourself these two questions, When to trade? What to trade?

(3) Risk vs. Reward Ratio

How much are you willing to risk to receive the reward? Some trades risk 1:1, while others risk 1:2. You should never risk more then what you will gain; for example, 2:1.

(4) Your Goal

Determine what your goal is in the forex market. Are you a safe or an aggressive trader ? Are you looking to do this as full or part time job ? By determining a forex goal; you will be able to make a conscious decision with your money.

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How to Learn and Invest Safely in the Forex Market