The Power of Trading Forex Using Price Action

By: Jim Buhs

Nowadays everybody is looking for the short cut when it comes to trading. They don't focus on the oldest form of technical analysis: Price Action. It's a shame more traaders aren't interested.

You can tell this is true by looking at any forex forum on the internet. What is it that you normally see on these sites? Usually it's people that are talking about some system that has 40 moving averages or some forex expert advisor that's supposed to be the new holy grail.

What's wrong with this picture?

For one thing, traders must understand that all these kinds of indicators, like RSI or stochastics, are only good for letting you know what has already occured. If you want the ability forecast future movements in prices, then i strongly recommend nor using these indicators.

The other thing that these traders need to understand is that 95% of all forex traders lose money. If that's the case why would you want to be doing the same exact thing that every other struggling trader is doing?

Think about this from a logical perspective. Chances are traders that are on a forum are struggling with their trading. If that wasn't the case why would they even be there? Most truly successful forex traders don't have the time nor the inclination to hang out in a forex forum.

What's really increased in popularity are the Forex Expert Advisors. For those that don't know, these are basically automated trading machines or robots. Developers program them using lagging indicators so the market trades automatically while you're away.

It's pretty obvious that this would attract almost every new trader. Who could pass up all that free time that an expert advisor gives you. You can be out the whole day and when you come home the trading robot has made you a millionaire, right? Well, you better thing again.

With Forex Expert Advisors, you're asking a computer to do something that 95% of forex traders can't even do. If you know anything about the forex markets, you know that news can really move the markets in a big way. Even more so than any other markets. How is a computer going to account for that.

If you want to truly understand the reason why the market moves the way it does, it's real simple. Less is more. Watch the EUR/USD for the whole day on a 30 minute chart without any indicators. Just follow the price action. I'll never steer you wrong. If you focus hard enough, you'll be able to see patterns that happen every single day. These are patterns that actually forecast the markets.

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Jim Buhs has become successful at trading forex after he learned how to trade just using price action. If you wan to see what he used to leaen how to trade with no indicators, make sure to look his squidoo lens.

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