I started my trading journey in 2005. Although I was introduced to trading by a large marketing company that promised to properly educate its students in all things related to trading it became apparent to me that the training that I was receiving was very basic, and that many of the concepts that I was learning were not even correct!
The Easy Way to Learn Forex Trading
I, along with many other folks, would meet together a couple of evenings each week and share the bits of knowledge that we all somehow stumbled upon by our own research. Believe it or not, there was not much information on the internet about currency trading, and what information there was, was not very helpful to new traders. We were very determined to learn how to trade, and we would dutifully show up and share with the group things that we had discovered on our own. We were taught more or less how to momentum trade on 5-minute charts using moving average crossovers. It didn’t take long to see that strategy was very flawed. I am here to tell you that 5-minute charts have NO momentum! We discovered indicators one at a time and would present them to the group, hoping that somehow that indicator would change our trading. Over time we joked that we were the indicator of the month club. I quickly lost hope in indicators, as they continually got us into losing trades.
All indicators are lagging in nature
They have no predictive value whatsoever. Sure you can slow them down, and even apply them to larger timeframe charts, but that requires employing a much larger stop loss on virtually every trade. Not a great trading strategy either. Still, I woke up every morning a couple of hours before I had to leave to my real job as the owner of a graphics company and face my trading computer, knowing that the odds were definitely not in my favor when it came to trading. I used to tell my wife that I felt like I was being greeted by the Grim Reaper every time I sat down to trade. It seemed like he wanted to be my constant companion. As lonely as trading was, I did not want his companionship. Something had to change in order for me to continue trading.
Well, something did change in a big way...
I Overcome my Fear of Forex Trading
I sold my business and home and moved to a different state. I had enough residual income that I was able to devote a couple of years to full-time trading. Just before moving I started to intensely study Elliott Wave and Fibonacci measurements. Through very deep study of Elliott Wave patterns, I began to recognize specific movements within the charts that tended to repeat themselves over and over again. Through proper application of Fibonacci measurements, I was learning how and where to expect the price to change direction. I studied historical price points and moves and started dropping off the indicators that I had tried so hard to rely on. I slowly eliminated all of the technical indicators that I had relied on and started to trade naked charts based on price movement. It was very liberating to no longer depend on lagging indicators and moving averages. I now set very precise exit targets, meaning I always look for stops first. Once my stops are in place I then find the very best entry base on the stop, usually well under 10 pips in total. A typical trade will put at risk perhaps 12 to 15 pips, as you do need to account for the spread, and we generally get into trades a couple of pips early and may push our stop a few pips as well. A potential trade with an actual stop loss of more than 10 pips better have a great look to it, or we simply pass on it.