The Market Wants you to Lose Part 2

Let me elaborate further on what I discussed in my previous post. In the world of forex, every gain or loss you make is a result of someone else's loss or gain, making it a zero-sum game. This also means that to come out on top, you need to be better than some traders out there.

Generally, traders can be classified into three groups - large firms or wealthy individuals, small firms or rich individuals, and small-time traders (which may include you). The market movements are mostly influenced by employees trading on behalf of large firms, who possess a wealth of experience and knowledge. Small firms, on the other hand, may not have a significant impact on the market, but they are usually good traders. Both groups are confident in their ability to make consistent profits, and while there may be occasional losses, it is challenging to outperform them in the long run.

The last group consists of small-time traders, including many inexperienced traders who view trading as a form of gambling. They make trades based on gut feelings or poor analysis, which typically leads to losses. As savvy traders, we can trade better than this group, and it is how we can earn money through trading options. You don't have to be the best; you just need to be better than the average trader.

If you are interested in learning more about my strategies, check out the tabs at the top and sidebar or click on the links below. With the right approach and knowledge, you can become a successful trader in the forex market.

Price action

Momentum Indicator 

Fibonacci Retracements

Comments/questions?

The market Wants You to Lose

An essential lesson that traders must understand is that every market participant, including big market makers, wants to make money at your expense. While this may seem obvious, it has significant implications that traders must consider.

Consider this scenario: suppose you had nearly perfect control over the forex market. What would be the best way to move the market to make a profit? Would you create predictable patterns, be random, or something else entirely? The reality is that market participants create patterns that attract traders, only to reverse the trend, whether intentionally or not. This is precisely what happens in the market, and traders must be aware of this behavior to improve their trading results.

Take a look at the recent chart example above, where the NZD/USD looked like it would continue its downward trend. However, notice the huge pullback on one of the candles. If you entered a trade based on the confirmed downtrend and put a stop loss at either of the red lines, you would have been stopped out, missing a lot of potential profit. A similar thing happened with the first uptrend on the left.

To avoid falling into this trap, set limit orders higher or lower than the apparent price action trend. Some people call this "stop hunting," but it can be used to your advantage. Sometimes the pullback won't happen, but that's okay. You don't have to enter every change in trend; instead, make fewer, smarter trades. By waiting for a pullback to the last major resistance/support line, you can avoid getting stopped out and work with the market instead of against it.

This concept is essential for making money in both binary and standard options trading. In the next post, I'll dive into this idea more deeply. If you have any questions or comments, please share them below.

Part 2 is found here

The Fundamentals of Most Binary Option Trading Strategies

Trading strategies can basically be split up into to 2 categories. Indicator based and visual based. Indicator based is where you have certain indicators on your chart and when they move certain ways, you enter the trade the way the indicator "tells" you to enter. When I first started binary options, I searched and searched for the perfect indicator that would actually tell me when and how to take the trade, but I never found it. Some people trade this way but I find it less effective than visual trading because of one key point: all indicators lag. This is especially critical in binary options where a delay in a matter of minutes to enter a trade could be the difference between finishing in the money or out of the money. In a later post I might talk about which indicators are the best and how to use them but I fine they really aren't very effective.

The second type of trading is visual based trading. It's using a basic chart and in its simplest form, drawing lines to predict how price will move(very scientific). More specifically, using previous low as values of support and previous highs of values of resistance. These values are where you want to enter trades as price has a good chance of reversing. This is also called price action. This can be explained a lot better in a chart example. Here is the 5min EUR/USD earlier today(sept. 17) with candlestick chart from freestockcharts.com

As you can see, price will often bounce off the same value more than once. Then when the price does fall and break the support level, the roll of the value is reversed (in this case to resistance). Now, price will bounce off it and go back down when price hits that value again.

Of course price won't always follow the support/resistance levels. However, the higher the time frame, the more likely there is to be a reversal. Price hitting a all time high is much more likely to reverse than hitting a 1 hour high. More on price action and binary options to come.

Price Action Part 2 found here

Things They Never Tell You to Succeed in Forex