Have you ever heard the expression of “the simplest way of thinking is the least seldomly used”? Basically what this means is that we, as a species love to over-think things. We think that nothing complicated could ever be solved by doing it in a simple manner. This is especially true when it comes to people who trade the forex market.
When you’ve got a percentage of traders who are losing money in the high 90 percentile, I think it’s time that we take a look at what all of these people are doing wrong. I’m sure it’s not from a lack of effort and their part. I’ve never met a forex trader who wanted to make money, and not be willing to put in the effort to achieve that goal. So I don’t think it comes from any kind of lazyness.
The biggest problems that I feel many forex traders have to deal with is just simply the trading environment that we live in. Let’s face it, looking back maybe 20 or 30 years ago, the amount of people who traded in the market (irregardless of whether it’s the stock market, bond market, forex market, options market, etc….) was miniscule. We live in the day and age of the internet, where information is accessible to everybody, and what was once a tool that was available to the elites, is now available to the masses.
That’s great but this has one BIG disadvantage going for it. The more accessible the information is to the public, the more likely the chances of that information being valuable, becomes less and less. What I mean by this, is that if you look at any forex trading forum on the internet, tell me what do you see? Do you see groups of people discussing the inner workings of the forex market, trying to find out what makes it tick, and why it does what it does?
Answer: NOT A CHANCE!! What you see instead is a bunch of traders who don’t have the slightest clue what they’re doing. So instead, they are looking for flashy indicators that will tell them when to buy and sell, or worse, forex trading robots that will do all of their trading on their behalf. Basically, they are looking for some golden parachute that will make them rich. So instead of just looking at the price and learning, people want to over-think that the market is some incredible mystery that nobody can figure out, and if I just put one of these toys in my software, the work will be done for me.
The market is really simple when you begin to trade forex using price action. This means no toys on your trading software. You are going to look at the movement of the price of a respective currency pair and try to understand what it’s trying to tell you. If you have an open mind, the process will be a lot easier on you. If you are going to sulk because you don’t want to put in the effort, then there is nothing that you are going to be able to do about having any kind of success.
Don’t expect to become fluent in price action from the first day you try this. It takes time to adjust your brain to be in tune with the market. You’ve got many years of bad habits to cleanse yourself from, so make sure to give yourself some time, because you are going to need it. But if you do what I’m telling you, you will see the forex market in a completely different light.