Psychological Battle In Forex!!

The frequency of repetitive fluctuation is so tempting and in fact it is the source of addiction to make you think making money in forex is easy and fast. It is so tempting that will create the desire to capture each and every single fluctuation in the lowest time frame such 5 minutes.

However the temptation is actually trap where you will lose the most money. Once you are engage into the fluctuation game, you will be in control of the big traders grip. They know exactly where you will lose your confident and close the position at least with some losses. So they will drag your position away with fake market movement that create losses. Once you have close it is time for them to reverse the course to the correct direction but you are already lose.

Tricks that big traders use to tempt traders into the trap:

1. Technical Indicators Direction
2. Fundamental Factors: Economic Data Release
3. The timing of economic data release

No matter what you do they always trick you day in day out. Beware of habits and take greater caution on fluctuation.

Highest certainty at the smallest time frame

How certain are you that the market will move in the direction you want and stay exactly the way you want it? I bet not many experience it all the time as expected and it might annoys you more if the market make an immediate reverse to the opposite direction by the time you want to close your position.

For example you like to trade at 4 hourly and daily time frame. Everyday you expected the market will move in your expectation direction and achieve the target profit as set by you. Unfortunately this good things doesn't happen in forex. The high volatility of the market is very disturbing. Sometimes the market reach at certain point and reverses more than expected or else it might move the other direction from your expectation.

So how to tackle this dilemma is by playing the 5 minutes candle by candle. By using short-term time frame you will get the profit quickly without waiting every 4 hourly or 1 day. This also to anticipate any reverse in direction that might exceed the amount of gain within a long day of trading. Nobody knows what happen in between the days or every hours because so many factors that affecting the market making it so difficult to determine the unexpected to happen. Among the factors that can disrupt the market is currency correlation, news release, indicators setting differences, long-term trader strategies and so on.

By applying short-term time frame trading you are eliminating the doubts and your losses also very limited to 5 minutes candle movement.

Hope this will help
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Why failed in forex? - Overbought and Oversold and when the market move

What is the main reason people failed in forex currency trading? This is a question that is hardly can be answered by anyone including the professional traders. A perpetual problem of currency trading that will last forever without precise solutions.

Even though traders can easily gain access to forex knowledge from forums, websites, e-books, and trading experience at free trading platform. This is to say that every forex traders alike are highly knowledgable about currency trading market both fundamentally and technically. You can find this on many stories of overzealous novice traders talking about their ambitious trading goals and technique can be found mostly in forums, commercial forex website, individual blogs, etc. But eventually none of this really works after all because they were right only at a time and wrong most of the time no matter what forex trading system is applied.

So what is the real problem? The answer is none because the problem will always remains as long as forex trading is concern. The first problem is no one can ever predict when exactly the market will move. This is because traders will never tell when they will enter their position especially the major crowds or big traders where we rely on for the market to make a move. The unpredictable time of movement usually frustrates those who setup their position too early this is especially for those traders who are using Moving Average Convergence Divergence (MACD) indicators. As the market do not move for example in 1 or 2 days, they already started to lose on the rollover fees. This delay movement forcing to close position early by sacrificing some losing pips and eventually also considered losses. (Read When the market move )

The second perpetual problems in forex trading is overbought and oversold situation. Every traders can witness this almost everyday in their trading activities. The candlesticks move frequently piercing the bollinger bands line defying the technical analysis goal that has been setup. Only later then it will only move back to expect position when the market is cooling down. And for traders who setup their position early on expecting for correction will get a lot of worries and doubts during this overbought/oversold condition. And this will become one of the driving force to close the position early to avoid further losses. In addition for those who are willing to wait, another condition may occur when will the market will make correction. What if it is making correction after 1 or 2 days later how much then you are going to lose for the carry over fees. This is simply why forex signals simply do not work.

So in order to be good in forex is not merely good in your fundamental or technical systems but also capable of anticipating the perpetual nature of the forex (overbought/oversold and when the market move). Many of us have fails in the forex market and others have already given up because they see the forex trading is simply unpredictable. This is because they have been too long in the market overloaded with knowledge of forex and too much reliance on certain technical analysis systems without considering the unpredictable perpetual factor of the market.

Therefore when you trade in forex be ready to anticipate the unexpected oversold/overbought and when the market move.

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When The forex Market Move?

The basic fundamental problem of every trader is a matter of when?!! Yes, when the market will move?

Even those who have the most experience who have spent years trading and studying forex the market still fail to get the precise timing of breakout. In fact there are many have become de-motivated after experiencing failures over and over again. The harder they tried and the worst it becomes and the more knowledge they have the scarier the market will look as their mindset becoming over cautious towards every movement.

This nerve breaking experience actually applies to every traders including of those the professional and novice alike. No one will ever escape it unless we just simply accept the fact it is actually work that way. The more you try to defy the fact the worst you will become because you are not willing to move on, but would rather prefer to remember the losses you made.

Therefore because of this we need to understand that everyone’s problem is simply because we cannot know when the market will move. This is a fact that we cannot deny and it is always true. Studying the precise market movement will be like a journey searching for the origin of life on this planet and end up still no answer. No matter how hard we try there will always be something that is very frustrating obstacle stand in the way especially the fundamental aspects of the market. Let’s say for example we try to predict when the market will move up and at the same time there is significant fundamental data will be released. As we expected the market to move up instead it goes to the opposite direction and wipe out significant amount of the margin. Due to extreme fears of losing the entire margin we may take a quick action to close the position as soon as possible. This is one of the most frustrating situations we don’t want to be.

Second scenario would be most of the time during significant breakout and the market is going for extreme oversold/overbought position. Everyone’s mindset quickly shifts to the thoughts of instant reversal. Instead of making immediate reversal the market moving slowly in side way flat direction, after long hours of frustration to wait we close that position. And suddenly at the same time the market move quickly for reversal which gives another big disappointment for closing the position early.

This is a dilemma of when?!! Please do not study when the market will move because you will end up getting the biggest frustration in your life. Instead you should learn how to guess the ideal time using the available time frame. Learn how to use MACD and Stochastic combination within a time frame of daily, 4 hourly, hourly, etc until 5 minutes. This will sharpen your instinct to determine the ideal time of market movement.

A simple example is if both Moving Average Convergence/Divergence and Slow Stochastic in 30 time frames are moving up. Therefore you will expect that the market in 5 minute time frame will move either to middle or to the top of Bollinger band line. This is depending on the starting position of the market if the market start from the bottom therefore it will end up in the middle or if it is start from the middle then it will end up on the top line of the Bollinger band.

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Train your mind following the crowds

Simply relying on the technical indicators itself to do the job will not make you a good trader. It is because most often those indicators fail at certain point especially when fundamental factors i.e. economic data release shake the market into volatility. As a result you will fail it during this time even the professional traders will have to accept the losses.

Therefore in order for you to be able surviving the vigorous volatility your instinct become very important. Guided by technical indicators you will have the confidence and you must utilize that confidence to produce results by the help of your instinct.



This will takes sometimes for you to learn in integrating those indicators and instinct into one. I have taken more than a year to have in place on my mind firmly first by studying closely all the relevant indicators such as stochastic, MACD, and Bollinger Bands while at the same time training my mindset to follow the market. You can do this by observing the behavior of the market prior to the indicators movement and also use the candlestick counting as guide.

Training your mind to follow the market is like the concept of water which change shape wherever it is put in. You will become one with the market if your mind can see what others are doing on the market. Keep train yourself i am sure you will be good next time.

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