How to learn to trade the forex market – where most people go wrong

It is clear that many people would like to know how to learn to trade the forex market. If this is you, you will have to make a decision. Will you have to use technical analysis and fundamental analysis? Most good traders have a good understanding of at least one of them. If you do not use at least one of them, you will have a very difficult time making a living in the forex market.

Unfortunately, most traders do not take the time to properly learn at least one form of analysis. We live in a time when traders prefer to trade based on what their gut feeling is telling them. This simply will not be accomplished.

Most traders really have no idea about fundamental analysis. I’m not talking about being knowledgeable as an economist or analyst. It would be unfair to make that comparison. But many traders do not even know the basics, such as the importance of non-farm payroll numbers, and how they affect the price of a currency. You have a lot of traders who have no idea how interest rate decisions affect currency rates.

This wouldn’t really be a big deal if more traders understood technical analysis. When most traders think of technical analysis, they think that all they need to know is when stochastics ask them to buy or sell. This is not a technical analysis.

Neither stochastic nor any other lagging indicator can give you any insight into technical analysis. All you need are your eyes and a simple bar chart.