Forex trading in price stocks can be defined as trading decision-making based on models of the price scheme, the models are created by simultaneous reactions of traders, to news and world events. The price trading is then a study of human emotions, depicted in the Forex price charts and presented to the trader in the form of price models, which are repeated over and over all time frames and in all currency pairs.
Before I discuss in detail why trading using price is the way you should trade Forex, I would like to discuss the technical indicators. The forex trader should understand that the technical indicators are derived from the price itself and as such lag behind the price action. This means that if you are a technical trader using purely indicator-based strategies, then unfortunately you are more than likely to fail in your quest to trade the markets for profit. In particular, you will enter the market too late and close your trades too late when trading with indicators.
When you extract a technical indicator from the price, you usually smooth some of the levels and peaks at the price itself, but more importantly, you build inherent delays of the indicator compared to the price, it is vital to understand and relate to the point I made at above – the technical indicators are lagging behind and it will cost you money.
If you look in the search engines, you will find numerous indicator based systems for sale or rent along with volumes of articles, trading robots and other secure fire systems that inform you how you can make money using an indicator based system All this is good and good, however, are these methods and systems really making money?
Assuming that over 90% of traders end up losing money in trading or clearing their accounts with pure forex trading, and assuming that most of these people use indicator based trading methods in the market, I think this tells us something about the indicator based systems themselves.
At best, indicator systems will help you break even the markets, while pricing methods will help you make good profits.
Price research is then, monitoring the activity of traders in the market, this can be seen and depicted in the market through the pricing model. The models express the emotions of the merchants.
In my next article, I will go into depth about price and start discussing and explaining the different types of price trading methodologies I look at on a daily basis. Methods that work well in the forex markets and are easily seen on charts during live trading.