• Forex candlestick charts and patterns
We discussed Forex charts in Part 7, but as they are very important to the way that I trade and teach price action, I wanted to give them a little more time. I have previously written an excellent tutorial on Forex candlestick charts that you can check out here: Forex candlestick charts
It’s important to understand that candlestick patterns have certain terminology all to their self that you should become familiar with before you attempt to master a trading strategy like price action.
I have an excellent free tutorial on candlesticks that you can read here: Forex Japanese Candlestick Patterns
Here’s a cool video on trading with Forex candlesticks: Forex candlestick reversal bar trading strategy
• The myth of automated Forex trading systems
While we are talking about different ways of trading the Forex market, I want to touch on what I feel is a widely believed “myth” regarding automated robot and indicator-based trading systems…
You are probably going to come across many Forex website selling Forex software that they claim will fully mechanize the process of trading, so that all you have to do is click your mouse when the software tells you to and then rake in the profits. You need to constantly keep in mind the old saying “If it sounds too good to be true it probably is…” when you are learning to trade Forex. Like I said before, you are probably going to come across a lot of these robot websites if you have not already. You are best served by ignoring them all together.
You will probably see track records that they claim are “indisputable” evidence of the robots performance in the markets…what they don’t tell you is that this track record is simply a display of a “perfect” set of data that the software was back-tested on. The point is that trading software cannot work over the long-term because the market is constantly changing and as such, it takes the discerning discretion of the human brain to effectively trade the markets over the long-term. I am not saying that computer software has no place in trading, but it cannot be the only thing you rely on, and it certainly should not be used in attempt to fully-automate the trading process. The ability to read the raw price action of a market and grow and evolve with the ever-changing conditions of the market is how I personally trade and how I teach my students to trade.
Move On Next Chapter: Part 9: Common Forex trading mistakes and traps
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