The Investor Diary Entry #48: August 21, 2023
To read forex trading charts there is what is called technical analysis. You will find thousands of people, articles, courses … etc. talking about strategies, tools, indicators, and all sorts of content preaching how to profit from trading.
I have been trying to trade since 2004. I have not been profitable with all my trials. Meaning, I could not make consistent profits to rely on trading as a source of income. The main skill that one needs to have is to know how to read Forex Trading Charts. That is not as simple as the statement appears to be.
In previous entries, I mentioned I was getting back to trading after stopping for about 12 years. During that time, I was still using a demo account to try several ideas which as well turned out to be missing that one puzzle piece to make trading something to rely on.
Making profits in trading is not difficult, but finding a system that will make consistent profits is the holy grail of all traders. Finding that system that best suits my style is my holy grail.
In July 2023, I took a basic course that marked my return to trading. I am still on a demo account and I will not go live until achieve the objective that I have set for myself.
How To Read Forex Trading Charts
Reading Forex Trading Charts or a trading chart of any financial instrument is, as I said, the main skill that one needs to acquire. It is for sure, not the only skill, but I consider it to be the main skill.
The main purpose of knowing how to read a forex trading chart is to be able to predict the next price movement. If one can do that, one can make a profit.
In my Journey to learning this skill, I would choose a certain technique, whether it was my idea or took it from other sources, and keep testing it.
Many courses, videos, and tutorials would teach one or several related techniques, but those also failed the test of time.
Today I finished a couple of long videos about the Wycoff method and supply & demand zones. Then something that was said made me remember a comment that the instructor said to answer one of my questions in the course that I took.
He said, to be able to identify what you are asking about, you need to look at the volume levels. The videos, coupled with this comment made me realize that a chart is a story being told in different ways by different players.
Creating A Story Of A Chart
This is when I realized that I need a combination of tools and techniques to enable me to know how to read forex trading charts in a way to create a story of a chart.
The story will enable me to predict what are the various scenario options of the next price scene. From there I can form a view of the most probable scenario to happen. At the end of the day, trading is a game of probabilities.
Knowing what the story being told is, will increase the odds of me knowing what the next price scene (price action) would be.
Trading Is A Game Of Probabilities
Yes, trading is a game of probabilities, as much as the word “probabilities” is being a keyword that many traders concentrate on, the word that I want to concentrate on is “game.” Yes, in the end, it is a game. When realizing that one is playing a game, then comes the next important realization that every trader should accept, you win some and you lose some.
You might even lose more than you will. With a proper Risk Reward Ratio (RRR) one can still make consistent profits.
The Required Skill Set
According to all these findings, the skill set that I need to acquire is the following; knowing the art of how to read forex trading charts in a way that enables me to create a story of a chart combined with the mindset of playing a strategy game where I know that on the way I might lose more trades that I win but eventually, I will be profitable.
That said, I am still stuck in the phase of finding the combination of tools and techniques that will enable me to read a chart and make a story of the chart.
Conclusion
I am not over-optimistic, I am a realist, and I know that in trading only a few retail traders are capable of making a living out of trading.
The main reason for this is that many enter the world of trading as if entering a casino. Between 2004 and 2011, this was my way as well.
My mind is still open to the idea that eventually I might find that trading is not for me. The next few months will unfold the remainder of the story for me.
Monday 21 August 2023
About The Author
I started to look into individual stocks in January 2022. I created this diary initially for myself to track my investing progress, and second, as a place where I can share my ideas publicly hoping that others will share their ideas and learn from each other, and lastly, as an online business where some links that I share are affiliate links, and if anybody bought anything by clicking those links I will get a commission based on that successful sale, which of course will not affect the price that you are buying the product or service at.
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Furthermore, this site is in no way or form giving any financial or investment advice, nor it is encouraging or discouraging people to buy or sell any financial instrument. This is a personal diary in which I track my progress and share it for informational, educational, and entertainment purposes.