How To Trade for Huge Profit Potential

By: Kelly Price

If you want to get better market timing for your forex signals you need to understand price momentum and how it can get the odds in your favour. If you have not used momentum oscillators before, then its time to make them part of your forex education.

Confirmation

If you simply try and buy low sell high by selling into resistance and buying into support your making a fatal error - why?

Because you are predicting which is the same as hoping or guessing and you don't get rewarded for relying on hope in any venture, let alone forex trading.

Many novice forex traders think that to win they have to predict - but as we don't know the future, this is not going to help you make money, you simply don't have the odds on your side.

If you learn forex trading correctly, you will understand that you need to act on the reality of price, confirmed by momentum oscillators which are leading indicators and can confirm trend changes.

Let's look at the correct way to use momentum oscillators in your forex trading strategy, so you can enjoy currency trading success.

Momentum & Support and Resistance

For example, when a price gets near to support you don't just simply buy - you wait for confirmation that price velocity is turning away from the level, by using momentum oscillators.

You're not hoping or guessing - you're acting on the reality of price change.

We don't have time to go through momentum oscillators in detail here (there covered in our other articles) but two of the best are - RSI and the stochastic indicator.

Look them up - their easy to understand and use and all you need to do is watch for simple visual setups.

Momentum oscillators can also help you take advantage of some of the best moves which don't involve looking for support and resistance to hold but help you spot if it will break.

Momentum and Breakout Trading

If you want to catch the biggest moves with your forex trading system you need to trade breakouts.

The fact is the best market trends don't start from market lows - they take off from new market highs.
Traders who sit back hoping for a lower entry point - end up just waiting as the trend accelerates and DOESN'T pullback.

Buying a new market high is difficult will it continue or do you get the worst possible entry point?

Momentum oscillators can help you decide.

If you have a breakout on your forex chart supported by rising momentum, chances are it will continue and you should go with the break. If momentum on the other hand is weak, it could be a failed breakout and should be avoided.

It's all about getting the odds on your side and that's what momentum oscillators help you do.

Momentum and the Odds

Momentum oscillators can help you time market entry better and also help you stay out of trades that don't have good odds. If you use momentum correctly, you will increase your odds of currency trading success.

So if you are trading forex keep in mind:

Don't rely on hoping guessing or predicting - rely on trading the reality of changes in price momentum and enjoy greater forex trading success.

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