“How To” Start Trading The Forex Market? (Part 8)

HOW TO predict the Future ?
by studying the Past (Technical Analysis):
1) The best traders don't discount one or the other but understand that having an
understanding how the fundamentals influence market sentiment gives him/her an edge
over those traders who don't.
2) In my opinion, TECHNICAL analysis is the easiest and most accurate way of
trading the FOREX market.

3) "The number's don't lie" - all available information and its impact on the
market, are already reflected in a currency's price.
4) Prices move in trends - the foreign exchange market is mostly composed of trends
and therefore a place where technical analysis can be very effective.
5) History repeats itself - over time, certain chart patterns become consistent,
predictable and very reliable. The question is SEEING them.
PRICES MOVE IN TRENDS
The traders who don't believe this obviously have no need to implement a trading
methodology on technical analysis. But, research has shown that those who trade
"with the trend", greatly improve their changes of making a profitable trade.
Finding the prevailing trend will help you become aware of the overall market
direction and offer you better visibility,especially when shorter-term movements
tend to clutter the picture.
HOW does technical analysis help to determine what the trend is and HOW to trade
with then trend versus against it?
Even though, you learn you how to use and read various technical indicators to
identify a long- term trend, spot predictable chart patters and use certain rules
to enter and exit a high-probability trade, and even though a ll this involves
sound logic, parameters, methods, formulas, data, and research, these technical
indicators, by themselves, are not the Holy Grail of FOREX trading.
It takes discipline and emotional control to stick with trading following through
the inevitable market ups and downs. Keep in mind, good technical traders expect
ups and downs.
Which technical indicators are the BEST?
NONE - technical indicators should simply be components of your overall customized,
personalized trading system, and not a stand alone system.
The objectives as a FOREX Technical Trader are:
1) To figure out the price action of the currency pair. Price is the main concern.
If the EUR/USD is at 1.2224 and goes to 1.2020, 1.1980, 1.1940- the market is in a
down trend.
Despite what every technical indicator might predict, if the trend is down, stay
with the trend. Indicators showing where price will go next or what it should be
doing are useless.
A trader should only be concerned with what the market is doing, not what the
market might do. The price tells you what the market is doing.
2) Always remember that technical indicators are only giving you confirmations
based on what the market is telling you. So listen to the market and let it tell
you which method, strategy or techniques you should use.