Wednesday, 26 December 2012

Logics versus price action in fx trading



A lot of folks are searching for logics when they study fundamentals in Forex or any other financial market. And they fail. Fundamental news and price action rarely have common logics. You might have the most promising data and the market will still continue to fall and vice versa, you can have the most disappointing data and the market will continue rising. What to do in these kind of situations? You stop following your logics and try to understand market logics. 

Well, there isn’t much logics in that expect that markets run on expectations. That’s it! And do not try to think otherwise, because you will fail. You’d better change your mentality and try to understand where the market is headed by trying to figure out market expectations. I have been disappointed a lot of times seeing how market fundamentals and directions do not add up. There is a good article on the topic by Kathleen Brooks on trade2win website. Read it to expand your knowledge on the subject. Here is the article. 

Ok, there are just a few days left till 2013. I will write at least one post before the event. Happy Christmas season. Do not overtrade while waiting for the best opportunities.

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