The Forex Strategy You’re Using That’s Holding You Back from Winning

The Forex Strategy You’re Using That’s Holding You Back from Winning
July 22, 2016 Market Traders Institute

 

Does this sounds familiar to you?

 

You go into your computer ready to trade.  You go to your favorite market-based website like Yahoo, or Bloomberg and check an article or two talking about the markets.  You bring up your charts, see a trend, make a trade based on that trend, but then the trend reverses. You lose your money, and you wonder what happened.

 

A common mistake beginner traders make is not looking for trend direction from the larger time frames.

 

The market moves in Fibonacci wave patterns regardless of time frame.  It’s important to understand the market’s relation to the current AB boundary on the time frame being traded from as well as the larger time frames. This enables the trader to make an educated decision as to what the market may do next.  Without this knowledge, the trader may be entering a position at the beginning of a reversal in the wrong direction.

 

This (losing) strategy is one that many new traders have, but it’s also the strategy that’s preventing them from consistently winning on the Forex markets.

 

So how could you avoid this disaster? It’s important to understand the market’s relation to the current AB boundary on the time frame being traded from as well as the larger time frames. This enables the trader to make an educated decision as to what the market may do next.  Without this knowledge, the trader may be entering a position at the beginning of a reversal in the wrong direction.

 

Look at the chart below.  See that the buy was made when a trader thought a reversal was happening.  There was a bear candle in between two bullish candles. They put in the trade thinking the trend was going to continue to rise.

 

But what happened?

 

The trend was bullish for a little while, but continued on it’s same path and took out the previous low, and continued to fall.

 

Trend Reverse Image.JPG

 

In short, not looking for trend direction from the larger time frames could kill your trading account

 

This is why Forex education is so important.

 

Yes, it’s important to read Forex articles and check out what’s happening in the world.  But it’s also important to know why the Forex is affected by big events.  Here are some examples of what in-depth Forex knowledge can do for your trading:

 

  • Pay attention to interest rate announcements.  Whether a country raises its interest rates or not gives a good indication on the state of that country’s economy.  A lower interest rate usually means an economy is in a recession, whereas raising interest rates says that an economy is beginning to rise.

 

  • Look at employment numbers.  Like interest rate announcements, if an economy is doing well, that country will be hiring more and giving more money to its citizens.  A country that has low employment or low employment pay, means an economy is struggling.

 

  • Know the safe havens. Certain currencies do better than others, and the world knows it.  When the market is highly volatile, traders will return to safe haven currencies as a form of calming the market down.  These safe havens are the US dollar (USD), Japanese Yen (JPY) and gold (GLD).

 

This is just a small sample of the things that true, professional traders know.

 

Getting an education is easier than you think.  It’s just a matter of finding mentors who know what they’re doing, and offering a program that’s built around you.

 

MTI is holding a special educational program TOMORROW at 11:00 AM EST. Which will explain these insider secrets to you.

 

Seats are limited for this special event, so RSVP soon.

 

The most successful traders are educated ones, time to join the crowd!

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