Forex Price Movement – Understand It and Make Bigger Currency Trading Profits

If you want to enjoy currency trading success, you need to understand how Forex prices move and it’s a fact that most traders simply don’t, they believe common myths and lose. Here we will look at how Forex prices really move and how you can take advantage of them for big profits.

All traders combined make the price of a currency and while the supply and demand equation is there for all of them to see, they all draw different conclusions from what they see and a simple equation for how Forex prices move would be:

Supply and Demand Facts + investor Perception of = Price

So its NOT the facts which are important, it’s the traders view of the facts which is the key to price movement. Humans are not logical, they trade on the information they see and this is coloured by the emotions of greed and fear. This is why bull markets collapse when the fundamentals appear most bullish and markets rally when the fundamentals appear most bearish.

Many traders believe they can predict prices in advance but this is impossible, as humans are not predictable. Others, think that complex systems based upon mathematics can help but again this is not true, as the markets don’t move to any equation.

You will find lots of gurus and Forex robots telling you that you can beat the market but you can’t and the reason these systems are for sale, is because they don’t make money trading!

So how can you win at currency trading?

The answer is simple – you may not be able to predict Forex price movement in advance but you can trade the odds and win. This means trading on confirmation of a trend change and not predicting in advance and keeping your losses small and running your profits.

The really good news is – in an odds based market simple systems work best and this is because they are more robust and have fewer elements to break so, all you need is a simple strategy and anyone can learn one of these, no college education required.

You should also trade the long term trends which last for weeks or months, because you can get the odds on your side long term but never try day trading, because, all short term movements are random. While day trading is popular but it’s a lot of effort for no reward.

As you can see, there is no way to beat the market or predict prices in advance but you can make big profits. All you need is a simple currency trading system which trades the odds and the discipline to keep losses small and run profits and your all set for long term currency trading success.