This minimal approach applies as much in forex trading as it does in our broader lives. Too many forex traders become addicted to the trappings of forex trading, rather than investing their time in what really matters. Perhaps the best example of this is the dozens of indicators that traders overlay onto their charts, in the hope that these will somehow bring trading success. Each indicator is like a prized possession – something that the trader thinks is highly valuable, usually without any good justification.
In fact, overloading market data with vast amounts of technical analysis is counterproductive. It creates an enormous amount of clutter, distracting from the important things that are actually happening in the market. This clutter just creates confusion and frustration, leading to emotional decisions that create trading losses. Rather than providing targeted insights, clutter creates a paralyzing overload – in other words, it has the opposite effect to what the trader intended. Instead of taking this complex approach, both beginners and experienced traders need to have a simple and manageable trading strategy that they can stick to. Whether this is trading horizontal levels, price action or some other basic, proven strategy, the important thing is that they execute the strategy consistently and accurately. The majority of big trading losses come because a trader made a mistake, not because the strategy was wrong. By keeping the trading strategy simple, the trader reduces the chance that they will make mistakes or become emotional.
This same drive for simplification applies to all of the paraphernalia associated with forex trading. While we like to think of successful forex traders sitting in well-equipped offices surrounded by multiple screens tracking the movements of dozens of markets, the truth is that much of this is just a distraction from disciplined forex trading. All a trader needs to be successful is a laptop and a reliable Internet connection – anything else is superfluous. By taking this minimal approach and focusing on a few currency pairs, traders can de-clutter their trading life, eliminating the unimportant – and focusing on the key things that will really help them to succeed.
Editors’ Picks
EUR/USD trims gains, hovers around 1.1900 post-US data
EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.
GBP/USD comes under pressure near 1.3680
The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.
Gold loses some traction, still above $5,000
Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.
XRP holds $1.40 amid ETF inflows and stable derivatives market
Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.
Dollar drops and stocks rally: The week of reckoning for US economic data
Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
I’m often mystified in my educational forex articles why so many traders struggle to make consistent money out of forex trading. The answer has more to do with what they don’t know than what they do know. After working in investment banks for 20 years many of which were as a Chief trader its second knowledge how to extract cash out of the market.
5 Forex News Events You Need To Know
In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success.
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.
The challenge: Timing the market and trader psychology
Successful trading often comes down to timing – entering and exiting trades at the right moments. Yet timing the market is notoriously difficult, largely because human psychology can derail even the best plans. Two powerful emotions in particular – fear and greed – tend to drive trading decisions off course.