By James Woolley
There are lots of traders all around the world who make excellent profits from forex trading. Some will trade from home using their own money, whilst others will trade for a large bank using the bank’s money. Both of these groups of traders will share similar traits and characteristics, so how can you emulate their success yourself?
Well first of all you need to have an incredible amount of discipline, as well as a real desire to succeed. You need to work long and hard to find a winning system, which can take some people many months and years, and then you need to be disciplined enough to stick to this system and make sure that you use strict money management principles. You should also ensure that you do not start chasing losses when things go against you.
However what I really want to talk about in this article is the need to trade like the professional traders. This means using the same time frames, the same fibonacci levels and the same levels of support and resistance.
So in other words you want to be seeing the same things that the majority of other traders are seeing because this will make your task of making consistent profits a lot easier. In a lot of cases traders will react to things in a certain way, which makes it easier to predict price moves in the currency markets.
Therefore you do not want to be using less common time frames such as the 3 minute chart or the 2 hour chart, for example. You want to be using the most popular time frames that a lot of other traders are using, such as the 1 hour and daily charts, for instance.
You also want to be using common tools such as fibonacci retracement levels on these most common charts because they will help give you areas of support and resistance where the price is most likely to reverse in the opposite direction.
You also want to be drawing lines of support and resistance on your charts that are likely to be identical to those used by so many other traders. If you draw your own arbitrary lines on your charts, then it will be a waste of time because the price probably won’t react to any of your lines of support or resistance.
So the point is that you need to have probability on your side if you want to make money from currency trading, and the best way to do that is to trade the most common time frames and identify areas of support and resistance that everyone else will be looking at as well. The price will often react in a predictable fashion around these key areas because many traders will be seeing the same levels of support and resistance, and will act accordingly.
You don’t need to use lots of fancy indicators to be successful in this industry. You simply need to follow the professional traders, who will often use minimal indicators and simply trade price action around the key support and resistance levels that everyone else is looking at.
About the Author
Click here to read a review of Currency Cash Machine, the new membership site that allows you to mirror trade the signals of a professional hedge fund trader, and to find more tips and strategies relating to forex currency trading.
