Posted: July 12, 2009 | Categories: Steve Rising's Trading Success Series
...Us here today and talk about one of the key elements that makes the Forex market different than other markets. And that key element is that the directional bias is constantly shifting. In other words, we can look here at the British Pound vs. the US Dollar. Here's the start of the day roughly at midnight east coast time, we can see here from midnight to roughly, here 7 AM.
This is the European session, and we can see here that this pair was bearish during that session and as we moved into the next session, we can see that we're bullish, in other words the bias has shifted.
Directional Market Bias
And this is a very common condition that we see in trading the Forex market in all the currency pairs, where in one trading session we can be going south, or bearish, and in the next trading session we're going north, or bullish. In other words, we have a constant shift in the directional bias.
Because of this constant shift in the directional bias, this is one of the reasons why many people have difficulty trading this market is because they're using the wrong technique. they're trying to find some type of trend based activity using trend lines or ABC patterns or wave theory or they look for extensions, and just when they think they have the direction figured out, all of a sudden the bias immediately shifts moving into the next session, and then they get into trouble.
Scalping Is An Appropriate Trading Strategy
So once again the key element I like about trading the forex is the fact that the bias is constantly shifting, and the technique that's best suited for trading in a market like this is a scalping technique, where we can go in and look for small fractional profit targets that we simply then add more lots onto to increase our profit objective, and we can trade this market in either direction once we understand how to manage this constant shift in the directional bias. And that's what our methodology teaches at the forex trading institute.
To learn more about this and our strategies that we trade here at the Forex Trading Institute, please attend one of our free online trading seminars that you can register directly from our website at theforextradinginstitute.com. I'm Steve Rising, have a fantastic day.
