Forex Charts - 5 Fatal Errors Traders Make That Cause Losses

Forex charts can make you money, technical analysis works and can make your forex trading strategy a success - but it only works if you use your forex charts in the RIGHT way and most traders fail to do this, which sees them make 5 fatal mistakes that cause losses.

Here are your 5 fatal forex chart errors to avoid

1. Using Technical Analysis On Invalid Data

You need to data that is valid to apply technical analysis and the biggest error a forex trader can make is to try and day trade. Forex day trading causes traders to lose because volatility in short term time frames is totally random and can and does take prices anywhere. This means support ad resistance levels are meaningless and you cannot trade them.

Forex day traders never win and blame their tools but it's the data length that's the problem.

2. Predicting

Many traders think they have to predict where forex prices are going to go to win - but this simply means they are relying on hope and if you rely on hope you will lose. You need to execute your trading signals on your forexc charts on price momentum changes - this will put the odds in your favour and allow you to win.

If you don't know what momentum indicators are learn about them now, o get ready to lose.

3. Buy Low Sell High

This is related to the point above point - people simply love buying dips but they don't have price momentum on their side and their guessing and more often than not get it is wrong. Furthermore, it's a known fact that most of the major currency trends start from market highs NOT market lows and traders miss these moves, as their waiting for the dip.

They should be thinking, "buy high sell higher" and going with the breakouts rather than waiting for pullbacks that never come and make them miss the move.

4. Too Many Indicators

Many traders believe that the more indicators they cram into a forex trading system - the better, but the total opposite is true. When there are to many indicators used the system has more elements to break - it's a fact that simple systems are more robust and more profitable, so when using forex charts keep your system and technical analysis simple.

6. Using Indicators Wrongly or Ones That Dont Work

If you're using an indicator - use it correctly or not at all. For example, traders use moving averages to execute trading signals - It's a lagging indicator! and should never be used to execute trading signals.

Traders also like to use Bollinger bands to execute trades but this is simply a volatility indicator and should not be used to execute trading signals.

Many traders also use indicators that dont work and the most common is the fibonacci retracement - its got to be the dumbest indcator out there - devised to slove a problem to do with the copulation of rabbits in the 12th century, its been hijacked by vendors selling it as way to make money - try it and lose.

If you want to use forex charts to make money you have to obey the rules - if you make any of the above mistakes you will lose.

It's a bit like being a captain of a boat your charts can help you navigate the ocean and earn a living - but if you use them incorrectly and break the rules of the ocean you will lose. So be a good captain in the forex markets, use your technical analysis correctly and navigate your way correctly to big gains.

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