What is the fastest and most logical route from point A to point B? Without question, the answer to this simple question has the simplest answer of all: a straight line. Sometimes you may have heard a distance referenced as being a certain number of miles “as the crow flies,” because this is the distance directly from one point to another without any obstacles in the way. In many aspects of life I have found that the simplest approach tends to be the most efficient way to do something. Adding moving parts to a machine will always mean that there are more aspects to the machine which may need maintenance in the future or just that there are more things which can go wrong! In trading, the very same rules apply.
If you are hoping to achieve consistent, low-risk profits in your FX trading, I would strongly advise you to think about adopting this “as the crow flies” philosophy into your trading as well. But this can often be a far harder task than people first think and it is very important to recognize why this is. Of the many misconceptions there are about the currency markets, I would say that the two biggest challenges the FX trader faces on a daily basis are with the economic news releases which come out daily, and secondly with the conventional forms of technical analysis which they are using. In the last few years, there has been a constant stream of information and opinion flowing out of the European markets, with this all having huge repercussions on the prices of the EURUSD. Ask anyone on the street what their thoughts are about the future of the single European currency and they all have an opinion!
Do we think this is a good thing? Well some would say that it isn’t, as it makes it tough to make the right call on the market when there are so many relentless factors potentially shaping prices. On the other hand,… Continue Reading
