Online Forex Trading is simple!

If you drop this pronouncement on any forex forum, you’ll run a big chance that you’ll get lectured at, as many forex traders are still going through a daily struggle. Some of them still haven’t got a profitable forex trading system, while others keep struggling with matters like psychology and risk management.

Hence a bit of nuancing should be the right thing to do now and then, nevertheless in the next articles I’d like to show you that in fact online forex trading is rather quite simple, but it’s people like us who use to make things complicated without actually having a reason to do so.

I’m convinced of the fact that this partly has to do with a lack of understanding of the most important factors which occur when people are going to practice online forex trading. This means that we are used to approach online forex trading from a wrong point of view or that we even make it unnecessarily complicated.

Technical Analysis, Fundamental Analysis and Market sentiment

Dependent on the extent of what you so far have been reading about online forex trading, you might have already encountered the terms technical analysis, fundamental analysis and market sentiment by now. Briefly summarized, these are three different kinds of analysis’s, which are used by forex traders. There are many discussions going about which kind of analysis should be the most appropriate one and it definitely is a fact that many novice forex traders are starting their search from this point of departure, but in fact this question isn’t relevant whatsoever at the beginning. Obviously this will be discussed later on, but first of all it’s important for you to understand how you’ll be able to get successful in the long term. You have got to believe me, in principle this has almost nothing to do with the fact whether you apply technical, fundamental or sentimental analysis’s.

What really is the point in case of online forex trading

It’s very important for you to understand one aspect very clearly:

Profitable forex trading consists for about 90% of psychology and risk management and no more than 10% consists of a strategy or a trading system!

Determining exact percentages remains difficult, but at this very moment it’s the proportion that counts. The unusual fact occurs that many forex traders are focused on the above mentioned 10%, that is to say on aforex trading system or strategy.

The problem with this is, that the foundation is not sound. When the foundation of a house isn’t solid, you can build a house if you like to do so, but eventually the house is definitely going to collapse like a house of cards ( ok, I admit it’s a bit exaggerated, but I assume you get the message). In case of online forex trading the same applies. With a bit of luck you’ll dispose of a good forex trading system, but that will be of no use to you, when that other 90% (representing psychology and risk management) is being totally neglected.

In fact it should be the other way around. In the first place you should have the right mindset and on the second place you should gain an insight into the factors which are important to become successful and consequently you should base your forex trading system on these conditions!

The most important factors to become successful in the long term

In the next articles I’m not going to discuss matters like analysis’s, candlesticks and all kinds of other substantive issues, but on the contrary I’m going to emphasize the basis concerning the most important factors to become successful in the long term.

De subjects which will be discussed in the articles to come, are the following:

  • The probability theory
  • Simplicity
  • The right mindset
  • An appropriate risk management

After these subjects have been discussed, I’ll also explain how these factors are integrated into the OFS Trading System. But please don’t be mistaken, as these factors are important for every forex trader, regardless of the forex trading system he/she is employing!

Summary of the article series “Forex Trading is simple!”:

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