Nowadays everybody is looking for the short cut when it comes to trading. They don’t focus on the oldest form of technical analysis: Price Action. It’s a shame more traaders aren’t interested.

You can tell this is true by looking at any forex forum on the internet. What is it that you normally see on these sites? Usually it’s people that are talking about some system that has 40 moving averages or some forex expert advisor that’s supposed to be the new holy grail.

Do you see what’s wrong with this picture?

Off the top of their head they should realize that all these indicators like moving averages or stochastics are always lagging. They are great if you want to know what has already happened, but it provides no ability to forecast future prices.

Traders also need to be able to understand that 9 out of every 10 forex traders are losing money as you read this. If this is the case, why use the same exact tools that all the other struggling traders are using?

Think about this from a logical perspective. Chances are traders that are on a forum are struggling with their trading. If that wasn’t the case why would they even be there? Most truly successful forex traders don’t have the time nor the inclination to hang out in a forex forum.

What’s really increased in popularity are the Forex Expert Advisors. For those that don’t know, these are basically automated trading machines or robots. Developers program them using lagging indicators so the market trades automatically while you’re away.

You can see why this would be right up the alley of a new trader. After all who wouldn’t want the ability to come and go as you please. You can go anywhere you want and in the meantime this robot is going to make you rich, right? Actually that’s not the way it works.

Remember with expert advisors, you’re asking something from a computer that 95% of all the traders in the world can’t accomplish. Being that the forex markets are so new driven, do you really think that a computer is going to be able to quantify any kind of breaking economic news that comes out?

If you want to truly understand the reason why the market moves the way it does, it’s real simple. Less is more. Watch the EUR/USD for the whole day on a 30 minute chart without any indicators. Just follow the price action. I’ll never steer you wrong. If you focus hard enough, you’ll be able to see patterns that happen every single day. These are patterns that actually forecast the markets.