Forex Signals

When you're starting out, one of things you discover is that only a few forex traders actually scoop profits out of the market consistently. Just a tiny minority. Everyone else is losing, or just breaking even.

So what's their secret? Do winning forex traders have some special talent? Have they found some inside knowledge and locked the rest of us out? Do they have a knack of thinking "positive" or thinking "winning"? Are their computer more powerful and their trading software more sophisticated?

What is it? Well...It's none of the above! Let's have a look at the figure below.

BAD signals:

The typical beginner trader moves with the "herd". He sees a rally, doesn't want to be left out, and enters the market at point A. However, by then, winning traders, who were in earlier, start to cash in on their profits and the rally loses steam. So the beginner's position falls. His money is dissolving before his eyes! Either he panics and gets out at point B, when he can't bear the pain any more. Or, if he somehow manages to stay in long enough to see the next rally, he leaves at point C, relieved to recover at least some of his losses. This is exactly the kind of "herd" trader that successful traders prey upon.

But actually the beginner also lost at point C. Because during that exact same move the winning traders had leveraged their trading capital, entered and exited at the optimum times, and stuffed their accounts with profits!