Here’s a part-comment, part-question I received from a trader named Garry the other day.
Simplicity is the key, so what do you suggest is the best way to trade fx markets? Daily charts and what indicators if any?
Firstly, I’m going to agree that simplicity is generally a better idea for most traders than complexity. That’s not going to be the case for everyone as some traders thrive with complex methods and ways of evaluating markets, but an awful lot of traders would do better thinking more simply about things. There is a tendency to think that more is better when oftentimes it isn’t.
As for the best way to trade fx, there is none. There is only what’s best for you. The process of becoming a good trader is largely the process of figuring out the optimal way for you to approach trading and the markets. That’s why I spend so much time laying the groundwork for doing just that in my book and course. Without knowing quite a bit about someone, I can’t really make any judgement about what’s best for them. It’s a very personal sort of thing.
Here’s an example related to Garry’s question about daily charts and indicators. I personally am not a great fan of indicators. Some very successful traders swear by them, but I’m primarily a chartist. They only indicators I look at in any meaningful fashion are ones which provide me a relative reading on volatility. You could argue that those aren’t even proper indicators the way others would define them. They’re more like statistics. And as for the daily charts, I very often look at the weeklies (or longer) because I like to do more position trading than shorter-term stuff, but then I also look at shorter term charts if I’m looking for a shorter term opportunities.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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