Thursday, April 23, 2009

What is the Best Forex Strategy

Many forex traders find themselves asking the age old question what's the best forex strategy? To know the answer to that question, one must look at the history of trading. Not just forex trading, but trading, in general.

The moment that the first bell rang on the stock market floor, traders were coming up with strategies to beat the market. Obviously they didn't have the technology that most of us have at our disposal. They didn't have the thousand dollar charting platforms that so many traders are overpaying for, just for the privilege of using them, nowadays. So how do you think the successful traders of the past made their money?

Well, one way was through fundamental analysis. They were able to comprehend a company's financial statements such as balance sheets, income statements, statement of cash flows, etc. to know a bargain when they saw one. But these kind of people would be categorized as investors, not traders. Traders generally believed in technical analysis over fundamental analysis.

So how did traders of that generation made their money? Simple. They understood the concept of price action. Plenty of floor traders became rich just by paying attention to how the other floor traders were trading the respective stock.

How come a concept as simple as price action has been pushed back in favor of all the technological bells and whistles that most people use in their day to day trading?

People, today somehow feel that the best forex strategy has to be in these maze of indicators,colors, noises,and whatever else is en vogue nowadays. Its really quite sad that it has gotten to this point.

Traders used to pride themselves on how they were able to truly understand the market, but in the present time we live in, they are more worried about understanding what their indicators are telling them.

If you want to learn forex, then its a good idea to learn from our ancestors. The less is more approach has and will always result in more success. To find out more about price action and to get a forex trading education, make sure to visit Trading In The Buff.

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