Forex Trading - Why You Can NEVER Predict Forex Prices

If you think you have to predict forex prices in advance to win your wrong. It's a sure fire way to lose but you can make huge profits if you understand this simple point... Forex trading is a game of odds

That's all it is but understanding this is your key to forex trading success. There are lots of systems on the net and vendors who tell you that you can predict prices in advance but prediction is another word for hoping and guessing and that won't get you anywhere in forex trading or in life.

There is no way to predict what will happen, as markets don't move to science ( and if they did we would all know the price in advance and there would be no market) but they are not random either - chart patterns come around time and time again you can trade for profit. You won't win every trade but if you win more than you lose you can make money and that's the object of forex trading.

You need to simply trade the reality you see on the charts no hoping or guessing and act like a good poker player would: When you see a good hand in poker you bet on it sure you're not guaranteed to win but if you always bet with the odds in your favour you will win longer term with your forex trading strategy.

A Great Way to Trade the Odds Is to trade breakouts to new chart highs or lows - look at any chart and you will see most major moves start from breakouts. With a breakout, you don't predict you wait for the breakout to occur and trade the reality of the price break. While this sounds simple most traders can't do it. Why?

Because they haven't predicted it and think they have missed some of the move. They therefore want a pullback where they can get in at a chart low and of course the trade does not pullback and they never get in.

Traders like to get in at a "comfortable level" and predict a top or bottom but the odds never favour them and they lose.

The lesson of this article is - trade the reality and forget prediction and focus on the odds. If you trade in this way you can make a lot of money and a breakout forex trading system is a great place to start.

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How To Start Forex Position Trading

Forex position trading strategy is a simple technique to increase your position size without increasing your risk. This trading strategy is particularly effective with mini lots and with averaging into a position also it works equally efficiently for standard lots.

For example you may buy one mini-lot of EUR/USD at 1.3100 and set the stop loss at 1.2980. It pose a risk of $20. When the price rises, you may buy a second mini-lot at say, 1.3120 and set the stop at 1.3100 with raising the stop of the first lot to 1.3100. Now you have two lots with overall risk still at $20.

If you find the price to be still rising, you buy a third lot at 1.3140 and set the stop at 1.3120 along with rising the stop of the first two lots also to 1.3120. This would ensure that even in the worst case the whole trade is at break even. Now, with further price rise, you buy a fourth lot at say 1.3160 setting the stop at 1.3140.

Accordingly, you raise the stop on the first three lots at 1.3140, which will protect your profit. Finally, you buy the fifth lot, set the stops as before and ensure a profit of $100. Throughout the process your risks remain at a constant of $20. So in this forex position trading strategy, you limit your risk exposure and at the same time gain handsome profits.

You can use a similar forex position trading method to average your trades. Weekly 3-bar pattern is a strategy which is ideal for forex position trading and which is very effective on longer time frames like the daily or the weekly chart. This forex position trading strategy lets you stay with the trend for a longer period of time.

Ideally, any day trading should be done with minimum lot size position. With forex position trading strategy, the initial profit is less but with trailing stop it can maximize the profit. A good position of day trading can be changed with forex position trading into a long-term profit option.
With forex position trading your exposure to the market is less and therefore no need to monitor the market continuously. The hedging order protects the position and limits your risk in the trading. With forex position trading, you can earn profit with minimal loss that boosts your trading confidence.

You can find many trusted money management software to calculate tradable profit/loss patterns along with optimizing trade sizes for supporting your forex position trading strategy. These software are designed to calculate trade position sizes according to various money management models with several successful positions sizing formula.

The forex position trading strategy may use formulas based on fixed percent risk, float percent units, fixed units, etc. The software are easy to use and help in calculating the most optimal position size for forex position trading strategy. You may also have many online position sizing techniques and position size calculators, which can supplement your forex trading strategy.

To learn more about currency trading techniques visit Forex Position Trading
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Online Forex Trading Education

There are many people who are interested in forex trading. But before you start trading in forex, getting a good online forex trading education is important. The forex market is largely a technical market with its own forex terms and processes so it is important you grasp the fundamentals with an online forex trading education.
Why Online Forex Trading Education?
Most people who want to try forex trading are often busy with other aspects of life to take care of. They probably do not have the time to attend a course on forex trading. Therefore, an online forex trading education is more suited.
Since it’s online, you can take your time to read and digest the information at your own pace. Also most of the basics of forex trading can be found online for free. There are tons of websites that provide free forex trading courses and tutorials.
There are also free forex trading seminars online available plus advanced forex trading courses online such as the forexmentor program. While it’s usually not free, the costs are pretty cheap compared to attending a forex trading course in a classroom.
Another important part of an online forex trading education is practice. I believe no matter how well you understand forex trading or if you score an A in a forex trading course, the real deal comes when you actually start trading.
Most forex trading sites provides a demo account for new beginners to forex trading to learn how to manage their forex trading account. There is no monetary risk, so it is a very good way to learn the ropes.
Once you feel you have sufficient experience, you can open a regular forex trading account or a mini forex account. I would highly recommend you open a mini forex account and start trading in smaller amounts. It has all the features of a regular forex accounts yet you can start one usually with about US $100.
It’s important you do not rush through your online forex trading education. Take your time to understand and start trading in small amounts to practice. As the saying goes, practice make perfect.
Ricky Lim runs an online forex trading education site for beginners. Visit his site today for more forex tutorials such as a free forex trading strategy.
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