NiaTradingSignals

1. Predicting Market Response.

I don’t know how to say this. Unless I am a prophet, I really don’t know where a particular foreign currency is going to .Actually no one does. It is not foolhardy to think that since you know the next unemployment report number which you got from the latest news provider faster than anyone else in the world, you are now ready to kill the forex market. The forex market is like water, it finds it’s own level and will do what it wants to do.

The forex market will probably do what it wants to do. Lets take the recent example where the USA securities market was falling. Normally ,if US stocks are falling, you would expect the eur/usd to be following suit. However the losing trader is the one who did not know that the Japanese market was falling at a faster rate. Always remember that the market will do what it wants and not what you think it will do.

2. Market Trends

Whatever you do in trading, don’t ever trade against the prevailing trend. However getting caught up with news trading at 8:30am on Friday will not allow you to trade with the trend. A trend is in place for a reason. Most of the time ,you being a retail forex trader,you will never know the reason. However, placing those moving averages ,trend lines and channels in your chart will save you a pretty penny.

Contrary to popular belief, trends are not easily broken. So why trade against them? It is always the broke trader who screams ,I did not follow the trend. Find your own techniques on trend trading and stick by them.

3. Market Spikes

If you have traded forex for more than a month, you have been caught in a spike. It will happen sooner or later and it’s part of the trading game. Disciplined traders don’t mind spikes as they have proper money management and also know that sooner or later a spike will be in their favor .As such spikes can’t make you broke .

However if you are busy trading the news ,spikes will make you broke very quickly. Spikes are the main reason that made me stop trading the news. In my wisdom I “knew” that the gbpjpy was going to move up because of a certain tip I had received from a “forex guru” . Needless to say I found out in 2 minutes that the market can spike up 200 pips and down 200 pips then up 100 pips in less than a minute. All this time ,my stops hit and the forex broker inputting his own prices. Yes I have lost 500 pips in a trading bar. My view is so will you if you continue trading the news.

4. You Know Nothing.

The Reuters News feed will not give you news before your broker. Neither will you have privy to forex fundamental secrets that no one else knows just because you have the fastest news service. What makes the retail forex trader think that they know more than a battery of economists and forex analysts who have phd’s and all they do is try and figure out what it means when less people bought margarine last month? Trust me those guys exist. By the time the fundamental news is coming on Friday, these guys had already assumed where the market was going to go. So ask yourself a very simple question. What makes you think you know more than these big firms?

Think about this scenario. An analyst finds out some new information about the Japanese export numbers .He reports this to Reuters and then Reuters sends it out. You would be a fool to think that no one else knew about that story before you.My advice ,if you know something you think no one else knows, confirm it with technical analysis.

5. Gambling in Forex

If you want to lose money in forex, then treat forex like a get rich quick scheme. You will probably have noticed how hard it is for you to trade in comfort when trading forex news you don’t understand. You start sweating and staring at those charts every tick. You find yourself moving from an hour chart to a 5 min chart to a 10 sec chart ( I laughed when I had that one) . If you find yourself confirming a trade after you have placed it, you were gambling. You should be able to know what to trade, how much to risk ,how much you might gain and trade expectations before you place the trade.