The foreign exchange market, which is usually known as “forex” or “FX,” is the largest financial market in the world. Ive never understood why people want to have a complicated and more “advanced” trading system or method as they “progress” as traders. Does a more advanced complicated system really lead to more profits in trading? I’m actually optimistic about my future trading success for once, price action resonates with me and just seems to make sense. I can certainly see myself ‘getting it’ fairly easily, although some of the more advance patterns will take some time to learn. Most people are impatient, and the majority of Forex retail traders struggle. By using this technique, you’re letting the price action do the talking.

  • Take control of your trading with powerful trading platforms and resources designed to give you an edge.
  • In fact, it’s the only method I have used to trade the Forex market since 2010.
  • The end result of a conversion is basically exchanging one currency for another.
  • Stay informed with real-time market insights, actionable trade ideas and professional guidance.
  • Signing up for the Trade of the Daye-letter is the first step toward accomplishing this goal.

It is calculated from the interest rate difference between the two currencies you are trading. Instead of a debit, you receive a credit from the broker if the interest rates you trade are in your favor.

Trade A Wide Range Of Currencies

You never actually had pounds or euros sitting in your account, just some exposure to their price action. Many traders frequently confuse FX market-makers and liquidity providers, and the differences are truly blurred. Major banks and other financial institutions ‘make’ the market active and theoretically, a brokerage company may deal with those institutions without any mediators.

If I missed something or if you have something to add, don’t hesitate to leave dotbig clients reviews a comment below. Yet there’s a reason it’s still used today—it just works.

New Here? Not Sure Where Your Financial Journey Should Be Headed?

I see you have used price action since 2010 and of course have been very successful. I never heard of the pin bar strtegy as well as the engulfing pattern. Seems like you learn a new strategy the more you read and learn forex. For the period 1/9 to 21/9 Im looking at a realised paper profit of about 1650 pips trading all available pairs, probably about five trades a week. Im using a stop loss from sum of the two largest heiken ashi candles in say the last month, whether up or down, ie maximum likely price movement. A reliable Forex liquidity provider prevents such situations, offering traders to buy and sell pairs in correspondence with the market. The EUR/USD has the highest liquidity, covering 20.03% of the market.

Trading price action effectively is about reacting to what happens on the charts. You never want to try to outsmart the market by guessing what might happen. This is where you can use Forex price action to evaluate the momentum. And just like everything we’ve discussed up to this point, it’s incredibly simple. Both signals above offered incredibly favorable risk to reward ratios.

Is Forex Better Than Stocks?

After leaving the Middle East with a shipment of oil, you drop it off in the United States. The buyer pays you in American dollars, but your company is based in Europe. In order to bring your profits home, you have to convert your dollars into euros. For a tailored recommendation, check out our broker finder tool.

Get Free Trade Setups From Justin Bennett

Fees, minimum deposit requirements, withdrawal, account opening, research tools and more. We use over 50,000 data points and a consistent, fact-based methodology. Instead, trading just shifts to different financial centers around the world. So you see, the forex market is definitely huge, but not as huge as the others would like you to believe.