Forex Diaries : Blurry Thoughts Of A New Trader |2022
Introduction
My search for a profitable side hustle led me to many avenues, including blogging, photo editing, affiliate marketing, crypto, trading. I had always knew forex was a typical buy-sell currency market and people had made millions out of it, but headlines from Google search made it look like a very easy, good risk-to-reward venture.
With all those screenshots of heavy earnings within just few hours, or even minutes, the internet convinced me to try the forex adventure. YouTubers and books showed out perfect sceneries. Little did I know picture reading was that hard.
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My motivation almost dried out when I couldn’t successfully predict movements in the market for, at least, 3 times. To be honest, all the books and videos I watched still didn’t save me. The experienced traders always seem to find perfect setups for their contents. What I saw on charts were way different from what I learnt with.
If you’re here, I want to spell it out that I am just a novice in the world of forex. However, I think if I could explain the same topics, concepts, setups, strategies from a newbie’s standpoint, we both will stand a chance to better understand and relate more than from only the viewpoint of an experienced trader.
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To begin with, market trading, in my opinion, is more psychological than technical. This is because it involves humans, or computers with “brains”, carrying out the trade and the rate at which people buy or sell their stuffs depends on how they think of the situation. For instance, you can decide to sell your expensive watch for peanuts because you are in a dying need for that money. That is how I think forex too works.
However, the technical aspect is also important as you cannot know what people are thinking. In that case, you will need to assume, which cannot be highly appropriate without any prior information. This is why we learn to use the charts, news and indicators to predict the future prices. It’s more like we’re using the technical analysis to assume the psychological movement of the market.
My Forex Lesson For The Day
Chart
Chart is just a picture. Within that simple picture is a whole lot of stories, cues, clues and patterns that gives predictors tough times. Like any puzzle, you can get lucky, but what’re the chances? This is why you need to understand certain moments, recognize some patterns and improve your probability of being right.
Actual information on a forex chart https://www.investopedia.com/terms/forex/c/currency-conversion-forex-charts.asp
It will be nice to be able to predict every single movement on the chart as it means more money. Since it is highly impossible, the best way is to master some key moments. Think of it as you having to focus on your job/skill even though you can learn to do everything.
Candles
It is undeniable that the only way to understand something is to break it down and reason around the elements that make it up. Every successful trading journey relies on chart reading, which is not possible without first understanding the candles on it.
I won’t bother much on the parts and meanings of the candle. You can read on that in the link below.
All about candles https://www.dailyfx.com/education/candlestick-patterns/forex-candlesticks.html
To make the discussion flow, I will categorize candles as
- Green – bullish
- Red – Bearish
Each one has its significance in both psychological and technical analyses. For instance, when you see a green candle, it means technically that the price at the beginning of the trade period was lower than the price at the end of the period. Psychologically, it means that buyers took more control of the period than the sellers.
In the same way, a red candle will mean technically that the price at the beginning of the time frame was higher than the price at end of the period. Psychologically, it means sellers were in control during that period.
The wick or tail of the candle also has valuable information to traders. It shows the extent to which the control struggle between buyers and sellers was during the trade period.