Forex Logics

Author: XEN
Filed Under Forex |

Forex, I have only one word to describe it… amazing. It has twists and turns, it always amazes you and keeps you going. It takes more than a genius to find the perfect strategy.

I’ve always dreamed of that near-perfect strategy, and always said “It’s here, it’s in front of me, it’s in here and I can’t see it. There is a right combination of actions I can make in this room to find the perfect solution to this… but I can’t see it.”
I don’t know how many geniuses there are out there, how many are rich… how many just don’t care or how many are milking a cow somewhere in a farm, never going to see more of this life.

I’m amazed how the Forex always keeps everything random, just like in the Universe… the system always finds a solution to flaws. A flaw in the Forex would be a near perfect strategy… that would always win. You know why no one can double his account every month ? Because there is no real pattern in forex, every reaction is a psychological response to past action. Meaning that there’s no real way for the market to evolve.

Imagine going into the monitor, into the computer, with the speed of light… going trough each trader’s mind and seeing what they see. They react to simple pattern logics, visionary philosophers are rare… not everyone can understand pattern logics, and the fact that there is no pattern in forex trading.

I’ve been browsing the internet allot lately focusing on human brain reaction, psychology, and simple logics. Why simple logics ? Because they are the most used. Not everyone is Einstein, and even if they are geniuses… life might not give them the chance to use their “super-power”. Most of the traders learn from books, but reading every book on the planet won’t give you the chance to see a good strategy. Not even 50 diplomas won’t make you a successful trader.

Instead, books give you an idea of simple logics… probably more than 90% of the traders in the world use simple logics into taking a trading decision.

Many traders think all their trading success comes from Indicators, and rely mostly on indicators to trade. In fact indicators, have always acted like a “bone” for the forex, and traders … the muscles.

Indicators have never predicted, indicators have always been “rules” or “laws” or “levels”; they keep the forex in range, like keeping your dog in a leash. The indicator is sometimes right because allot of the traders in the world use the indicators and respect their levels. Why all indicators go wrong some times ? Because not all traders use the same indicators: some use one indicator, others use combinations, other different ones, and some… don’t use any and just rely on price action. That’s why popular indicator levels have strong power, but are frequently breached.

You know that, the only indicator regarded as a perfect probability in forex is… “flipping a coin”. Flipping a coin, and placing a BUY or SELL order based on the result is the single perfect probability indicator in Forex. The probability to be right would be 50%… there is no better indicator than that “ones” would say. But Flipping a coin and Technical Indicators have different types of probabilities. Even tough no indicator can get you 50% probability that you will win, indicators have better in-subject probability and rely more on logics than pure decision.

What I mean through this ? Think of a box, you can’t see anything in it, but there is a dot in it and it moves. you want to know in what part it will be tomorrow, left or right. You cut the box in 2 parts…either way the dot will be in one of the 2 parts. Indicators would tell you the direction it’s moving(inside), while the coin strategy would only limit the outcomes to left or right. So the logics of “coin probability” is: “the dot will always be in one of the two sides, it doesn’t matter how it moves until it gets there.” and the indicator logics: “the dot could always change direction, but it’s moving in [that] direction at the moment”.

Here are some memorable quotes I saved from various traders around the world. It’s said you need a genius to understand a genius, that would mean none of the quotes are writen by geniuses:

Everyone knowing a winning method, would make the method fail

This is not true because everyone buying/selling would mean everyone would win but it’s memorable because no one could ever make the whole world use the same strategy and at some percent it applies in some methods, mostly on the methods that use levels (this could be true at 60% using the same method, but not at 80%). I made “some” bold so that you will see that nothing in forex is certain.

I will add memorable quotes from time to time here. Bookmark this !

Your comments are more than welcome.

Tags: Forex, Forex Trading, Genius, Logics, Psychology

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