Forex Trading – Understanding Scientific Trading Theory

The Forex market is run by humans, and human nature can be predictable. So it then follows that the Forex market is predictable, doesn’t it? We will find out the answer. Many Forex traders are using scientific theories that assist them in predicting the market and help them on their way to success and profit.

So what are these scientific theories? Let’s take a look:

There are many Forex trading systems that claim accurate predictions of market fluctuations. Do they live up to their word?

The most commonly used theories are taken from the works of W. D. Gann, Elliot, and Fibonacci. These theories operate on the basis that the market moves to science. But this reasoning is wrong. Human nature is often not logical and scientific. We do not operate on a predictable method, so why should the market? If there was a scientific theory to human nature, then we would not even have to worry about the market, because we would all know beforehand the prices and the rises and falls in the market.

Gann, Elliot, and Fibonacci never made a lot of money with their theories of a scientific market, but some traders do not realize that and stick to their methods rigidly. Just think about it. If these theories worked perfectly, why isn’t everyone following them? The answer is because these theories are flawed.

So What Do You Do?

In order to succeed and make profit from your Forex trading, you have to know the right way to trade and the most efficient and intelligent systems and methods.

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The most important thing to keep in mind is that Forex trading requires trading the odds. It is crucial to realize that Forex is a market of odds, not certainties. This fact should not discourage you, because when you learn to operate by trading the odds and to rely on a solid, smart system, you will succeed and find Forex trading the ideal opportunity to achieve your financial goals.

Because we humans are ruled greatly by our emotions, the Forex market can be subject to highs and lows based on traders’ panic, greed, or foolishness. Weathering these abrupt changes and using them to your advantage can be simple.

Playing The Odds?

Forex trading is forever going to be a game of odds. Many, many traders lose and suffer losses. It is inevitable, and science and complicated prediction methods are not going to change that. But if you make sure to get a thorough education in Forex trading and practice your decisions and ventures in a demo account, you can bypass many of these initial failures.

The basis of Forex trading, and what makes successful traders win, is having a simple, reliable, stable method that you have analyzed, perfected, and tested in your demo account. Once you have this strategy, it is very important to stick to it faithfully. Sudden decisions, changes, and reactions based on gut instincts or emotions are what makes traders lose and what makes the market spike.

Keep your trading simple, logical, and steady and you will find that you are already on the road to Forex trading success.



Source by Ferris Malone

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