Currency Price Movement - 3 Myths Traders Believe That Cause Losses

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A basic understanding of how and why Currency prices move, is essential to achieving success yet, most trader's believe the myths enclosed, if you believe them you will lose your money quickly.

Here are the 4 myths about currency trading price movement which the majority of traders believe which cause losses.

1. Markets are predictable in Advance

This is the message the vendors of cheap robots sell and it's wrong and all these software packages lose money. There are also theories the far out crowd love like - Fibonacci Gann and Elliot and they all claim markets move to some mystical code and can be predicted.

Of course if this were true these theories would never lose a trade and they do. Its obvious markets can not be predicted because there made by humans and there actions are not predictible in advance.
If you want to win forget science and learn to trade the odds and while you may not win every trade, you can make a lot of money over time.

2. You can Trade News Stories and Win

News does not move prices, the opinions of traders does and that's why markets always change direction and fall, when the news is most bullish and rise when the news is most bearish. Trading news stories is a mugs game and you will lose if you try.

3. Buy Low Sell High is a Profitable Method

This means having to predict prices in advance and we have already seen that's not possible, if you want to trade with the odds on your side trade breakouts to new market highs and lows, all big trends start and continue from these and if you do breakout trading correctly, you can make huge gains over time.

4. Day traders and Scalpers make Money

They used to before the age of instant price information, when they could take advantage of having the price before the herb but that advantage vanished with the internet. All volatility in daily time frames is random and trading it is the same as flipping a coin - You can not get the odds on your side and you can not win.

Trade the Odds and Keep it Simple

Many traders insist on making Forex trading more complicated than it really is and trying to find some hidden code to currency trading movement but there is not one.

The way to make money is simple - use a strategy based on trading the reality of price which is simple and robust and employ tight money management. If you do this, you will not win every trade but over the long term, you can end up making a triple digit income in around 30 minutes a day.

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Source by Samuel Leslie Berkovits