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How do forex traders predict price?

  • #1
  • First Post: Jun 13, 2012 10:11am Jun 13, 2012 10:11am
How to know when to enter long or short? I don't know how to predict price and always betting.

Thank you
  • #2
  • Jun 13, 2012 10:34am Jun 13, 2012 10:34am
go to babypips.com school
learn support resistance

then you can understand a little better where price is going to go.

Oh and by the way traders don't predict the price. The market does. Traders work on probability.
  • #3
  • Jun 13, 2012 12:34pm Jun 13, 2012 12:34pm
If you approach a trade thinking you know where price will move, you've created a strong bias in your mind, and this will make it hard to admit you were wrong.

Instead, approach it like this: Perhaps price might move one way, and if so, what could I stand to win/lose?

The future price is just 'perhaps'. All good traders do is set themselves up to make more when it works for them than they lose when it doesn't... mattering not if they were right all the time.
FXGears.com
  • #4
  • Jun 13, 2012 3:35pm Jun 13, 2012 3:35pm
Quoting Jack_Larkin
If you approach a trade thinking you know where price will move, you've created a strong bias in your mind, and this will make it hard to admit you were wrong.

Instead, approach it like this: Perhaps price might move one way, and if so, what could I stand to win/lose?

The future price is just 'perhaps'. All good traders do is set themselves up to make more when it works for them than they lose when it doesn't... mattering not if they were right all the time.
Nice easy to understand summary of trading!
  • #5
  • Jun 14, 2012 4:11am Jun 14, 2012 4:11am
Quoting mm2mm
How to know when to enter long or short? I don't know how to predict price and always betting.

Thank you
Learn how to read charts and do your own analysis, then you will be able to make a decision on how to proceed. the decision is based on what you see, either you are using trend lines or reading candles. after all that, then you will place a stop loss if the market doesn't go your way. Market is always unpredictable. One more important point, learn the right places to place your stop loss when you are wrong and not based on pips but based on peaks and troughs and money management skill.

regards,
  • #6
  • Jun 14, 2012 5:26am Jun 14, 2012 5:26am
Million dollar question this one.
My contribution is that is also important to let go a strategy. sometimes one thinks is brilliant, but if doesn't work for you, just let it go; and also be prepared to keep on changing it, no strategy is perfect all the time. the market changes, so must the traders.
  • #7
  • Jun 14, 2012 12:27pm Jun 14, 2012 12:27pm
by having KNOWLEDGE of the market.

that comes from:

- knowing the basics (what is price actually ? a PERCEPTION ! - i could go on on this one, but maybe that's for another thread), supply, demand, basic economics
- knowing what moves the market, how the market works
- studying fundamental analysis
- studying technical analysis
- reading books
- reading forums/sharing experiences and thoughts with other traders
- watching trading videos
- HUNDREDS and THOUSAND of hours in front of charts a.k.a experience
Twitter: @forexpokerpro
  • #8
  • Jun 14, 2012 5:14pm Jun 14, 2012 5:14pm
Quoting Jack_Larkin
If you approach a trade thinking you know where price will move, you've created a strong bias in your mind, and this will make it hard to admit you were wrong.

Instead, approach it like this: Perhaps price might move one way, and if so, what could I stand to win/lose?

The future price is just 'perhaps'. All good traders do is set themselves up to make more when it works for them than they lose when it doesn't... mattering not if they were right all the time.
HAHA couldnt agree more. We would all be wizards.
Know when to hold em, Know when to fold em!
  • #9
  • Jun 15, 2012 9:22am Jun 15, 2012 9:22am
Quoting mm2mm
How to know when to enter long or short? I don't know how to predict price and always betting.

Thank you

its an accumulated time and knowledge in forex, that lets the trader predict not to be exact but its a mix of fundamentals and analysis and its can be achieved but studying forex again and again and spending tons of hours try to predict
  • #10
  • Jun 16, 2012 4:29am Jun 16, 2012 4:29am
Quoting mm2mm
How to know when to enter long or short? I don't know how to predict price and always betting.

Thank you
You are always betting because it is. Even if you can survive 10,000 trades, trade # 10,001 is still a bet.
  • #11
  • Jun 16, 2012 10:35pm Jun 16, 2012 10:35pm
Consult Magic 8 Ball.


Seriously, it comes in time with watching hours upon hours of chart time... after awhile you develop a sense for it. If you don't then run far, far away.

  • #12
  • Jun 20, 2012 11:43pm Jun 20, 2012 11:43pm
Quoting mm2mm
How to know when to enter long or short? I don't know how to predict price and always betting.

Thank you
Prediction is hard but possible, red is predicted vs blue actual values. In this experiment 4446 data were used to predict from 4447 to 4678.

http://img805.imageshack.us/img805/8351/prediction.png

http://img716.imageshack.us/img716/9...edictionmt.png
  • #13
  • Jun 21, 2012 12:58am Jun 21, 2012 12:58am
Really interesting one. What's your timeframe?

For short term stuff.. i've been adopting the order board levels that are posted pretty much daily on forexlive.com

Though my experiences with these certainly seems to place them as EXIT's rather than entries, and even then, nothing you can walk away from, as there usually is a range for the bids and offers.

If there's a real distance (+10 pips) between the current price and these, anything is possible.

EDIT: Course basic technical analysis on one timeframe up, support and resistance and (to a lesser degree) daily pivot levels are also good price targets. If you have a strong trend on your chart, fibonacci retracements are also excellent, though i wouldn't ENTER a position based off the levels.
  • #14
  • Jun 21, 2012 1:38am Jun 21, 2012 1:38am
Quoting stockmarcus
Really interesting one. What's your timeframe
Hi stockmarcus,

For the prediction only past data history is used, 1 minute frame, another examples:

http://s18.postimage.org/uxh6altt3/ex_EUR_USD.png

http://s14.postimage.org/yzn2iiir3/ex_EUR_USD_b.png

http://s18.postimage.org/hzpb10aw7/ex_USD_JPY.png

Its rare but sometimes it could be possible to predict consecutive seconds with no error, in this example 11 seconds

http://s16.postimage.org/ruem1yw03/ex_EUR_USD_22.png
  • #15
  • Jun 21, 2012 10:31pm Jun 21, 2012 10:31pm
Hmmm.. prediction may be a bad way to look at it.

Perhaps its better to have done your analysis and determined that there is a very likely -chance- the market will go in a particular direction.

I assume that once im in a position, i'm going to have to manage it out, whether at success or stop.

So do always better analysis and manage your trade out.. Its not certain enough to try and "predict" if you know what i mean.

Subtle but possibly important distinction..?
  • #16
  • Jun 27, 2012 11:25pm Jun 27, 2012 11:25pm
How do forex traders predict price? I think they are based on their intuition and experience, on technical and fundamental analyses and economical news
  • #17
  • Jul 3, 2012 12:08pm Jul 3, 2012 12:08pm
If we had the answer to that question, we'd all be rich. The reality is that the majority of retail traders can't predict the market and will lose. The rare few who stay in the game will predict the market using analytical skills they have developed after many hours of studying the market.
  • #18
  • Jul 4, 2012 12:00am Jul 4, 2012 12:00am
Predictions are always difficult especially about the future.
  • #19
  • Jul 10, 2012 2:30pm Jul 10, 2012 2:30pm
managing losses is more important that direction of prices.
  • #20
  • Jul 11, 2012 4:44am Jul 11, 2012 4:44am
Quoting mm2mm
How to know when to enter long or short? I don't know how to predict price and always betting.

Thank you
Here's a simple way to predict price:

By following the main trend. Unfortunately, this is not as easy as you think. It is counter-intuitive to enter on a pull back in a trend so people enter when the price is trending strongly. This is usually followed by a pull back, or retracement and the poor trader watches his/her trade go into drawdown. "Hmm. Got that wrong." is what they say, and close the trade. And so losses are compounded.

There are lots of ways to tackle this problem. One of the easiest is to use moving averages to (a) identify a trend and (b) identify a pull back.

Trouble is, moving averages give all sorts of bad signals in a choppy or consolidating market.

Here's a very simple system which will help rookies see entry opportunities:

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd120711m5.gif Size: 317 KB


So we see at point 1 the price is consolidating and the moving averages are mixed up.

At point 2 the moving averages are both pointing up and the price has retraced somewhat. A good entry would be where the price leaves the moving average again, continuing up.

At point 3 we see the moving averages muddled again, with one pointing up and one pointing down. No trend, no trade.
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