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Forex Trading - Can You Use Too Many Technical Indicators
By: James Woolley
The majority of people who trade forex use technical analysis to make their trading decisions. They generally use a wide variety of the hundreds of technical indicators available at their disposal, but how many should you use if you want to be a profitable forex trader, and can you use too many?
There's no question that the internet, and the subsequent ease of access to technical charts and indicators, has led to more and more traders being able to learn and become accomplished at using technical analysis to help them make trading decisions.
Indeed, people will spend hours on end experimenting with numerous different technical indicators in order to find that holy grail combination that will help them to become rich from trading the forex markets.
However no combination will prove to be 100% successful. The key is to find a combination that suits your trading style, and enables you to make high probability trades that will give you a positive equity curve (ie profits) in the long run.
If you have a sound stop loss policy and a rigid and disciplined trading system based on certain indicators, then you can make a good income from forex trading.
You don't need to use several indicators at once. Indeed many top traders argue that you should minimise the number that you use, simply because the more you use, the more you will get conflicting information, and confusion and uncertainty does not equate to profits.
For instance you may use six different indicators to help you make your entry and exit positions, but you may, for example, have four of them indicating an oversold position and telling you to enter a long position, but the other two are crossing downwards and indicating a forthcoming downwards movement, so in this case you would probably abandon the initial long trade you were going to make.
This is further complicated when you use multiple time frames because this becomes even more of an issue. Multiple indicators over different time frames will invariably give you conflicting information and the net result will be that you end up not trading at all, and essentially always being afraid to take a position.
This is why so many top traders recommend using just a few tried and tested indicators. You don't need to have a really complex set-up to be successful. You can make a decent living from forex by just sticking to a few basic indicators like RSI, stochastics and MACD, or just using support and resistance levels to make trading decisions.
Furthermore, some traders, like Avi Frister for example, only use one indicator, and argue that it's the only one you really need - price.
So if you're striving to become a profitable trader, don't overcomplicate things. You can be just as successful using just a few simple indicators than constantly trying out the latest and greatest new indicators in order to find that elusive winning combination.
To read more about Avi Frister http://theforexarticles.com/forex-trading-machine-review/
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foreign exchange students
So you want to become a forex trader but aren't too sure where to begin to learning process. Well, you're in luck. In today's information age, the internet is an invaluable tool that can help you find just the type of forex trading training that you'll need to make it big in foreign currency trading.
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Forex TRADING: A MIND GAME
You must change your mental attitude first from a normal person to that of a speculator. Almost all traders I have met, except a few successful ones who really made millions and billions trading in the market, simply waste all their time trying to learn the easiest part in perfection, like about how to read data and charts, and trying to perfect entry and exit skills, etc. Trading is a mind game and without having a right frame of mind, it is a losing game even before it starts. Training a trader?s mind is the first step for any successful trader but almost all new traders neglect that part and that explains why more than 95% of traders are a failure in the long run.
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For those interesting in being involved with Forex trading, a basic understanding of how the system works is essential. Understanding both forecasting systems and how they can predict the market trends will help Forex traders be successful with their trading. Most experienced traders and brokers involved with the Forex use a system of both technical and fundamental information when making decisions about the Forex market. When used together, they can provide the trader with invaluable information about where the currency trends are headed.
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forex rates
The Tokyo Fix is where the FX rate is established for the day by the banks for their customers. So even though the FX rate may change during the day the customer gets the rate at the time of the fix. There is a fix in Tokyo, London and Toronto (more I am sure). Importers generally settle their accounts on the 5th, 10th, 15th, etc, of the month before and up until the fix ():50 GMT). Sometimes, if there is an "excess" dollar demand $/JPY will continue to climb slightly after the fix. $Bulls will also use this as a staging for extending a rally. $Bears (Yen Bulls) will use this to establish better shorts.
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Union: Venezuela to nationalize steel
Wed, 09 Apr 2008 12:35:12 EDT
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