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Did you know there are currently more than 100 technical indicators that you can use when trading Forex? Most charting software programs and packages available will provide all of these indicators to you — but the most confusing question is always: which ones should I use? There is no magic in technical indicators in and of themselves as they each can tell you something about the market’s behaviour at any given point in time. Nor is it true that any one indicator is better than another.
Our research and surveys have confirmed too many new, inexperienced forex traders simply do not know how to manage risk in each trade. All too often, the result is the same: they wipe out their accounts. This is what we find is happening. Forex has grown in popularity so quickly that many traders who are new to forex trading have just waded into the waters, opened an account and have begun putting on trades without any real thought or planning to how to approach trading.
One phenomenon that derails amateur Forex traders time and time again is method complexity syndrome. They research a trading method, buy it and the minute they receive it, they jump ahead to what they consider to be “the guts” of the method. In doing so, they completely ignore all of the other aspects of trading, including risk management, discipline, and psychology. They get into the “guts” of the method only looking for that big, mysterious, slap-your-forehead, jaw-dropping “secret” which will suddenly unlock the mysteries of the Forex universe and make them Master and Commander of every Forex pair. All too often, they find themselves completely disappointed or the “guts” reveal something they’d already heard about (but had not practiced). Amateur traders will then dismiss the method as ‘too simple’.
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