forex trading

Many beginners start out their Forex training by gradually building up a plethora of indicators with charts obliterated with every signal imaginable. No wonder such new traders often freeze with indecision as one signal seems to contradict another.

There is however a very simple indicator, that when fully understood, forms the backbone of all future Forex training and trading! What is it?

Before revealing it, guard against a typical reaction such as: "Is that it? I know all about that!"

This indicator, due to its simplicity, is often under-valued and insufficient time is spent by new traders in their Forex training sessions really getting to grips with it.

Probably The Most Powerful Indicator Of All

Now, what is it?

Support and Resistance!

To state it clearly, your Forex training will only start to really move ahead when you fully understand the impact that support and resistance have on market action. Here is a key principle to understand:

Support becomes resistance. Resistance becomes support.

Why is understanding this so crucial?

Because the thousands of traders in the global market place, handling billions of dollars for the big institutions, are constantly monitoring where price has been before.

If price reached a peak some days ago and has since retraced, that level that was reached becomes a key level of resistance. If you enter a trade anywhere near that level, understand that it will take major buying pressure to get price above that level.

Conversely, if price fell to a deep low within the last week or few days, for price to continue on down there is going to have to be intense selling pressure to pass that level which has now become support.

An Interesting Market Behavior Pattern

But now here is an interesting market behavior pattern you must drill into your brain as part of your Forex training:

Once price does break through that key level of resistance, it now becomes a level of support. If it is a key level of resistance that is broken, once price has moved on through by 20, 30 or 40 pips, it can become major support. What does that mean for the trader?

It is often possible to enter a trade at an optimal point by simply waiting for price to come back to test that strategic level that was broken.

So rather than chasing price and hastily putting a trade in once the market has started to move in a certain direction, wait for price to pull back to that key level that was broken. Put an entry order in at the level and wait for price to pull you in to the trade.

It may continue in the direction for 5-10 pips putting you in deficit but if you have done your research properly and identified this as a key level using other indicators such as Fibonacci or pivot levels, you need not fear. Price will quickly pull back, cover your dealing spread, and from there on you can enjoy the satisfaction of seeing price move toward your price target.

Time and time and time again the market behaves in this pattern. Exercising patience while you undergo your Forex training, and looking out for this particular market pattern can yield huge results.

Understanding support and resistance will give you an unbelievable edge on understanding how the market works. This in turn will help you enter and manage your trades to a highly accurate degree with minimal stops and reasonable, reachable targets.

Rather than trying to hit the home run, by looking at the next key level of support or resistance where price is likely to stall, you can walk away with a reasonable profit by setting your price target accordingly.

Look Under Your Feet

Rather than searching for some complicated, 'advanced' trading system, why not concentrate on what is right under your feet.

Get to grips with support and resistance, learn to quickly identify these levels once you open a chart, draw lines where you can see major support and resistance, especially on the higher time frames, and everything else you learn during your Forex training will fall into place.

RECOMMENDED BROKER!

Do you all know who are the 7 greatest investors in our human history?

Let's look at the exciting story about each of them.

#1: Warren Buffett

~ Known as "Oracle of Omaha", top of the world's greatest investor list.

~ Follows principles of value investing (Benjamin Graham), he becomes the 1st or 2nd richest man in the world

~ If you invested $10,000 in his company Berkshire Hathaway, today you have above $50 million.

~ He donated most of his wealth to Bill & Melinda Gates Foundation

#2: John C Bogle

~ Founder & Retired CEO of Vanguard Group mutual fund

~ Pioneered no-load mutual fund & low-cost index investing

~ named "Investment Giants" of the 20th century by Fortune Magazine

#3: Peter Lynch

~ One of the best stock-pickers in the world

~ Managed the fastest growing fund Fidelity Magellan Fund from 1977 to 1990

~ His fund grew from $20 million to $14 billion

~ Author of world best selling investment book "One Up On Wall Street", "Beating The Street" & "Learn to Earn"

4. Julian Robertson

~ Had the best Hedge Fund record throughout 1980s & 1990s

~ His hedge fund is world famous, Tiger Management

~ Compound rate of return was 32%

~ Named as "Wizard of Wall Street"

#5. Michael Steinhardt

~ 24% compound average annual returns over a 28-year period

~ Investor of wide range of instruments, including stocks, bonds, long & short options, currencies.

#6. George Soros

~ Legendary currency speculator

~ Shorted $10 billion on British pound & generated profit of $1 billion in a single day

~ Known as "the man who broke the Bank of England"

~ Also famously known as someone who "trigger" the Asian financial crisis in 1997

#7. John Templeton

~ He is a Billionaire

~ Pioneer of globally diversified mutual funds, Templeton World Fund

~ Before him, no one had heard of investing overseas

Success Always with You,