Strategies, Indicators and Forex Expert Advisors - What to Choose?
What does a fledgling Forex trader search for on the Internet?
Lots will be looking up 'forex strategies' aiming to get hold of a profitable and easy to use trading system. Fans of technical analysis will type 'Forex indicators' or maybe 'Forex rates' in the search bar. Less experienced traders, who want to automate their trade, will search for 'Forex expert advisors', and a trader who's tired of endless flows of news and charts will ask Google to find 'Forex video'.
But who is doing the right things and who is getting it wrong? And what is the most useful tool for successful trading?
We can find out now. Traders that are early on in their careers will be aware of some of the forex market phraseology but not know so much that can have definite opinions or views.
He will have a 30 - 40% likelihood of being familiar with aspects of forex possibly having completed some forex courses that will give him a little theory and maybe some practice.
So he looks to practice his new Forex knowledge using a cent account. He knows a little about some forex strategies and some forex courses but not much of this is used when trading. He's heard or even tried to work with Forex expert advisors on demo accounts, but he doesn't know how to test these advisors on the historical data in the MT4 strategy tester.
The novice trader either actively places 10-20 popular Forex indicators on the EUR/USD chart or just trades without using these indicators pinning his hopes on intuition and candle analysis.And he's seen some forex videos which is a little more interesting than staring at price movement charts.
So from all of these methods and tools, which ones make a professional trader?
Honestly? They all are!
But what is the difference between a professional trader, who earns regularly huge sums of money every month or even every day and a trader who is just starting out and would be glad to make 20 points of profit? Deposit size? Not really. Knowledge? Wrong. Years of practice? Nearly....
What separates these two types of trader is the very successful one will not only ACCUMULATE RELEVANT KNOWLEDGE but also BECOME ENGROSSED BY THE MARKET. A real trader learns to feel the market. He can't see not ever trading or not being involved in the market. This isn't about gambling addiction; that really isn't the case. The top traders have genuine belief that they will succeed and back themselves to do so. He is committed to his target and ignores obstacles. Any minor failures, sadness at losses or even losing deposits are not dwelled upon but viewed as minor lumps on the path.However the beginner loses interest straight away. He isn't ready to wait and needs immediate results.
He has read about a forex strategy he hasn't tried, works with it for a few days, it doesn't succeed so he drops it and tries a new one looking for the holy grail. But there is no Holy Grail and there won't be one either. So why does he choose not to scrutinize the matter and his chosen forex strategy?
Why not review the failure reasons and find some common reasons? Quite simply, because he has no patience and no persistence. So why do we use forex strategies? You need them to find the appropriate trading algorithm, to choose 'your own' Forex strategy, to learn something new and use it when you trade. It doesn't even have to be a total algorithm. The seasoned trader will use a maximum of two strategies for trading to make the real profit. On the other hand, a beginner changes Forex strategies like underwear, never persisting with anything long term. By taking such a shallow approach how can they ever hope to develop a detailed trading scheme when all that he does is glimpse at the product description? Trader-programmers developed Forex expert advisors (robots) to simplify the life of traders, who trade manually. So what do novice traders do? They adjust the forex expert advisor to trade for them using their last bit of money they have.
The more experienced professional trader will instead test the forex expert advisor using the strategy tester set to a 1 - 2 year period, examine the results, try out the robot with demo accounts, and then meticulously go through its trading approach. At this point, fully understanding the way the forex expert advisor works and choosing the appropriate robot he can then get the forex expert advisor working on a live account.
Quite a difference!
Almost all traders - about 99% - used forex indicators. But some traders simply overload a chart with indicators, making it almost impossible to conduct analysis. Others place 2-3 Forex indicators and follow a certain pattern of work with them. The benefits of a forex indicator are its ability to provide buy/sell signals and provide confirmations. But if there are too many indicators, they will only send signals that will confuse a trader. Put some candles onto a chart and also insert a couple of moving averages - fast using a period of 5 or 10 and slow with 50 - 100. However using exponential moving averages would be preferable. The last X prices are taken into account with moving averages thus minimizing lagging.
And then you can always optionally add 1-2 Forex indicators. The main thing is not to complicate it. Let's take a look at Forex video on the internet. What could be more convenient than to watch and think about what you've seen on the screen? But a lot of people will randomly download information which they will never look at and all it does is fill up their hard drive. Alternatively, there are those that will seek out videos from the 'guru' selecting the forex videos they are interested in.
To only use actual forex video is important.
For example, if someone is learning about fractal analysis they should get the associated forex video and make sure the sound is good and the video is of decent quality and then apply their learning immediately. If you don't use it straight away you will forget. Or if you have read about Alexander Elder and the trading system with triple screens, getting a forex video or forex strategies should be used to help reinforce the learning.
But don't stop there. You can open up a trading terminal and put what you have learned into practice. You will spend the day profitably and learn new information. Think how much you could make in a year! You deposit will grow like mushrooms before you know it!
If you have a desire to learn about how to trade profitably but are not keen on hearing from a range of assorted gurus from the cradle to the grave...
If you like numbers, charts and Forex indicators, enjoy watching Forex videos and studying new Forex strategies....
If you have patience and persistence... If financial freedom is something you are attracted to....
If so, then you simply must achieve your goal! You only need discipline and determination.
Good luck on this journey of challenge - The journey that all of the professional forex traders have already taken!