Trading Forex Successfully With No Indicators

I used to be like one of the many masses. I used to daytrade forex with all the lagging indicators and I wondered why I wasn't having much success. It finally dawned on me that i was trading based on indicators that were showing me what the market has already done not what it was going to do.

I was very lucky to come across the forex trading machine. I was finally able to learn how to read a chart without all the needless garbage that confused me. I am now able to finally look at the market in its purest form. In this hub i will be further discussing the importance of learning how to trade just looking at the price action with absolutely no indicators. To find out how I got my forex trading sucess, make sure to check out my squidoo lens.

Looking at all the high profile traders, there is one thing that they have in common: They predominantly trade based on price action. Its not like they are looking for price divergence in the MACD or looking for some moving averages to cross.

They couldn't care less about what some lagging indicators are singaling. All these indicators are doing is using mathematical formulas to tell people what has happened in price. It really does not provide any information on the current market is going through or what it will go through.

All you have to do is look at the self made millionaires that are on the trading floor of the NYSE. All they are doing is following what the market action is doing. Most of them, don't even use a chart. All of their decisions are based on price action. Its not like they scurry to their computer to see what the RSI is before they pull the trigger on a trade.

For people that are really unfamiliar wiht forex trading (or any other kind of trading for that matter). I strongly encourage many of you to get Metatrader. Its absolutely free.

Metatrader is charting software that offers charts on literally dozens of currency pairs in the forex market. There is a free data feed, so the charts and quotes are constantly streaming in real time (no 15 minute delays like you get with stock or future charting software).

Metatrader has all kinds of toys and indicators that you can play around with. But remember, we don't need them. But they are there for your enjoyment. So if you are brand new to charting, by all means, go crazy and have some fun. Push to see what every button does, cover the screen with every indicator you can think of.

You also get a free demo account that you can use to "play trade". So do some trading. its not like its real money. If you got to zero, you can always add more play money.

Go to Strategybuilderfx to download Metatrader.

It real simple actually. Traders like the easy way out so much that they'd prefet any of these trading platform companies that promise you all the special indicators that you've never seen before.

Lately there has been an onslaught of these magical indicators that do all the work for you. All you have to do is toss one onto your charts and viola! you've got the forex market figured out. All you have to do is follow when it tells you to buy and sell and all that's left is to count your money. There are literally thousands of these type of indicators in the market, both free and for sale. So, the question comes to mind why is it that 95% of traders fail to make money?

What these companies don't tell you is that these indicators do not provide you with any kind of insight as to the market conditions. It uses some kind of mathematical formula by using past information. What that basically means is that these indicators are hoping that the same paramaters that were successful some time ago, will have the same result. Well, the markets are a living, breathing entity and indicators could never be able compensate.

To find out how I learned to trade with indicators make sure to check out my squidoo page.

Forex trading has grown quite immensely over the recent years. They are fast becoming the day trader's favorite trading instrument. Here are some of the advantages of trading forex over stocks.

24 hour trading market: A great advantage for those that work during the day. With stocks, the market is closed at 4 om. So by the time, most people get home, they missed all the action. But with forex, there is always a time where you can place a trade.

Less money needed to open an account: While most stock brokerages have a minimum of $2000.00 you can open an account with most forex brokers for $500.

Greater leverage: With stock trading, you generally need a lot of money in order to make decent profits as well as building a solid portfolio, especially if you plan on day trading. However with the mini lots and micor lots in forex, your don't need a bundle of money to earn decent profits.

I'm curious as to why people seem to be going crazy over expert advisors. For those of you who don't know, an expert advisor is an automated forex trading system. Basically, someone programs an advisor to trade during certain conditions based on technical indicators are met. So basically while you're out running errands or asleep at night a robot is doing the trading for you.

I can certainly see why people would certainly want to do this. Who wouldn't want to spend all their free time with their friends and family or enjoying their favorite hobby. But have you ever looked around at any forex forum where the subject is expert advisors.

It seems like there are hundreds of EA threads. What really shocks me is how much time is being spent on these things. I've seen threads where the developer has spent years trying to get his EA working correctly. I notice the ones that do work well, only do so in demo accounts. Once people try them with real money all you hear are about the losses. I can't help but wonder if Metatrader is somehow involved there. People seeing success trading a robot that has shown them amazing profits, then they fund their account and start playing for real. And then BAM! trader are down 20% within a week.

The other thing that i don't like is the fact that an EA has absolutely no idea what's going in the markets. It's not like it knows that there is a dicussion of reising or lowering interest rates or gets the latest breaking news from Reuters about world crisis that is going to affect the dollar.

Doesn't it just seem like whenever you hear about a brand new trading system that solely relies on lagging indicators, like moving averages or stochastics, it sounds to good to be true?

Well, I wish I could just tell you that such and such broker was the best in the business, but to be honest, I can't do that. Because I don't think their is a "best". Every forex broker has their own pros and cons. Pick what's best for you. Each of us have our own different things that we're looking for in a broker. Here are just a couple of things to keep an eye on before making a decision:

1. Spreads - It shouldn't be the sole reason for picking a broker but it is nice to have low spreads. As a general rule, you don't want a broker that has a spread of more than 4 pips on the major currencies.
2. Margin - Depending on how much of a gambler you are you may want more or less margin on your account. Generally I use a 200:1 margin ratio. It gives me enough flexibility without having to worry about risking my account. I've heard from some people that they need a 500:1 ratio to trade forex. Personally i think that's absolutely insane. But to each his own.
3. Trading Platform - You want to something that's really accessible. You are going to be trading on this thin, you want to make sure it's not glitchy and quick and easy to place a trade. The last thing you want to do before you are about to open or close a position is to go click 5 or 6 buttons to do so. You shouldn't have to hesitate.

These are just some of the few things to look at when picking a broker. Obviously you'll probably have some other individual reasons for picking a broker.