Sunday, March 29, 2009

Something we don't know that you need to know in Forex Trading

As i was come from the rank of novice trader, i used to boast about my system telling people how accurate and effective it is. Day by day i am looking to improve the system into a perfect precise indicators to predict the exact time of break outs and also the distance from the initial until the end of the break outs.

However none of this will eventually work in the end and now i still prefer to trade within the range of safety zone and not to push myself to the limits where it should ended or precise setup. Why is this so?

Experience tells me so, when i come to realize that there are some unpredictable factors that playing bigger role in the currency market such as follow.

1. The number of people trading during a single day trade?
No body can predict or gather a statistical figure about the number of people trading in the forex market on daily basis. Even there is no technology yet to do this. If there is, then this will become an important factor to estimate the amount of money traded daily.

2. The amount of money traded on daily basis?
If we know the number of people trade in daily basis, we can determine the estimated volume of money traded. By knowing this we can precisely setup trading position at the correct place and estimate precise limit of movement based on the volume traded.

3. When will everyone place their trade?
This is an important questions that is never been solved in every minutes of trading. This effect can be seen on the daily trading chart of as to why there is short or long candlestick. Because not all people set up their trading at the same time.

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