[tommyfx]

Hi ABC,


I have replied to a number of your questions that you post, most of which ask things along a similar line of markets are unpredictable, fixed etc etc and every time people write back telling you this is nonsense. I know when things arent going your way its hard to believe there is sense in what appears chaos.

Look at a Eurodollar chart right now at time of writing 7:53 am (london Time) we have eur/usd at about 1.1939, as you can see price has fallen a long way and stopped here. WHy has it stopped here? Well zoom out to the 4hr and daily charts and you can see we are at a major support line. Because we have stopped and bounced at this level before this tells us the market (whether fixed or not) does not want to go below this point. Think about it, you would have to be VERY brave/foolish to place a sell order here because you know the USD is currently very expensive at this level. Other traders know this also so they are unlikely to place sell orders. The banks which quote us prices will tempt us by showing lower prices but people are not brave enough to accept them, and if they do they are just bought at a bargain level, the dealers know there is now a bullish undertone and they offer higher and higher prices untill people start saying "hang on, i think this Eur price is too expensive" and start selling, this is what the markets do, there is no fix about it.

You do not need lots of indicators, firstly markets range trade 80% of the time, most indicators just highlight trends so at least 70% of indicators will therefore be wrong 80% of the time. Secondly, most indicators lag, the charts look good when you overlay them on past price action, but by actually trading them you are missing part of the move, you have to anticipate not follow. Thirdly the majority of the rest of indicators show you over bought/sold levels in a range, this is utterly pointless, get a ruler, draw a trend line and there you will see the true overbought oversold levels.

But the real key to the market and the way people actually make money is not in the entry system, its in the exit, you could flip a coin, heads buy tails sell SL 10 TP 20 and you will probably make money because you have a 2:1 risk reward with a 50% accurate entry. What most newbies do is run losses and cut winners, so even if you are 90% accurate you will lose over the long run. You should be aiming for a 2:1 risk reward with an average system 50%-60% accurate, above 60% and you can get away with 1:1. The key is calculating what is a relistic TP i.e "am i likely to make 20 pips off this trade and if so does it make trading sense to have a stop 20-40 pips away? " These are the thoughts traders have, not is a 20,5 Ema cross better than my 40,3 Ema cross system and this is why most traders fail and then turn around and blame the market for being unpredictable.


Yes banks/institutions do step in and stop the currency from falling, but this isnt "fixing the market" or making it unfair, this is one of the main reasons we have FOREX so people can do this, fixing would just be not publishing offers below a certain price even though supply was there to push it down, this doesnt happen, if a bank wants to risk hundreds of millions of dollars to stop USD dropping thats their problem, they are jumping in the market like the rest of us, hoping their demand for the dollar will prop it it, sometimes it works and sometimes it doent (i.e when a resistance level fails) as a trader we must assess whether the banks demand to prop the dollar up is greater than the supply that wants to see it drop. You cant programme that into a computer, that is skill.