Understanding How The Forex Market Works

In this video:
00:12   Understanding the market
04:03   Profitable trades especially on the 4-hour charts
05:38   Really amazing trade on a gold trade

Understanding How The Market Works

Hi traders, in today’s video I want to explain the importance of being able to read and understand the market and then talk about the results that will surely follow once you have an understanding of how the market works.

Let’s get into that right now.

Hi traders, it’s Andrew Mitchem here, The Forex Trading Coach. Today is Friday, the 17th of October and I want to talk about the importance of learning to read the market and understand the market because it’s a common problem so many traders especially new traders have. Actually a lot of people that I talk to who have been trading for number of years though still do not really have a very good understanding of the market and there’s a number of reasons for that.

But one of the most common reasons is so many people use the standard indicators. When you look at any charting package, when you look at any online reviews or sites or whatever it might be, forums, etc., everybody’s talking about using the standard indicators. Yet when you think about it almost everybody gets the same results which are not good so there’s got to be some form of correlation there when you think of the logic behind that.

The problem is, that so many indicators whether they’ll be good or bad doesn’t really matter. The problem is they don’t really teach you how to read what’s happening in the market right now and to look at what’s happened previously and to make a judgment based on what’s happening right now. You see, the problem is with indicators is not only to most of them lag time and price really badly is that people get so focused on looking at where the line is, what’s crossing over something else, whether it’s overboard or oversold, you know, X crosses Y and ends up being something else, you know, it’s just a complete and becomes too much focused on the indicator rather than focused on the actual price. That also applies to people who trade robots and try to create systems that are automated, that happens as well because you don’t get to understand what’s happening in the market.

The way that I like to trade and also to teach my clients is to gain an understanding and read the market, read the charts, read the right hand side of the chart. Look at what’s happening right now in the market.

Are there more buyers in the market right now?

Are there more sellers?

Is the price being pushed up?

Is the price being pushed down?

And Why?

I’m looking at support and resistance level whether they be, previous swing highs or lows, or pivot points or round numbers, whatever it is let’s see the process moved up to this level.

Why is it moved up to there?

Is that a significant round number?

Is that a significant bounce?

Has the price bounced there previously in the past?

If it has and you see a good candle formation occurring at that same level then surely that has to add to the probability of that trade being a profitable trade because you’re taking a trade at a level for a specific reason based on what’s happened previously and you know that the price bounced there previously, you’re getting some indecision and then some confirmation whether it’s go long or short and then you’re taking your trade at a level that in the past you’ve seen this  being a significant price action at that level.

What Really Counts

So it’s getting to understand that type of information within the market and also having the ability to do that from the right hand side of the chart what’s happening right now. Taking trades in hindsight you know back testing it’s all well and good for learning but it doesn’t make you money you know it’s sort of theory in some ways. Making money from the right hindsight of the chart is what really counts.

To give you some information about that, I held a 2 ½ hour live webinar for my clients yesterday and I showed the number of trades that I’ve taken especially on the 4-hour charts trade myself over the last couple of weeks. They’ve been really profitable. Had a few losing trades like everybody does but a number of really good profitable trades to learn from.

Live during the session I took trades on the 5-minute charts, the 1-hour, the 4-hour and the 6-hour chart trades so a lot of really good trades taken but the importance of the session for me was not only getting that information across and being helpful for my clients but also getting the feedback from clients and the results that they have been getting themselves and that’s what important to you. You know, after all you need to gain results yourself, it’s all well and good in saying every week that I did this and I did that but you need to be able to take those trades and see them and take them and profit from those same trades yourself in real time and by yourself because after all that’s what most people want, it’s to be an independent trader. It’s all well and good copying someone else but you need to be able to take these trades for yourself. That’s where I like to see my clients go so well.

Amazing Buy Trade On The Gold

Give you some example. I had a client on that webinar live yesterday to the 5-minute trade on the Aussie Yen. It was a sell position; he made a 1.7 to 1 risk to reward out of that trade. Only I think maybe about 20 minutes. So 1.7 return risking 1% on that trade made him a 1.7% gain on his account just on that one trade. Had a number of other people making successful trades and reporting trades that they’ve taken over the past couple of weeks and the really amazing trade was a gold trade; a buy trade on the gold on the 4-hour charts that a client told me about and we looked at the trade live on the webinar yesterday. He made an incredible 6 to 1 reward to risk on that trade. So if he was risking 1% of his account on that trade he made an amazing 6% return from just that one trade and we went to look at it. It was a really nice trade buying gold at a low and buying it back up. Wonderful trading, 6% return from one trade, that’s more than almost any bank in the world will pay you in one year and he took that on one trade.

So it’s great to see that people are reading the charts, they are reading candle patterns and are taking trades by themselves in real time and making great money from that.

So if you’d like to know more what I suggest to do first of all is to have a look at one of the free webinars that I hold twice a week. Jump on to one of those so I have them especially designed whether you’re a new trader or whether you’re a more experienced and frustrated ready to give up type of trader whichever suits you. Pop on to those webinars and learn from them. There’s a lot of information given away on those webinars. If you want to get further then great, you know, I’m here to help. If you don’t, just watch the webinars and see what you can gain from those.

So that’s it for now. This is Andrew Mitchem from, The Forex Trading Coach.

Have a fantastic weekend and a really good profitable trading week next week. Bye for now.

Quick Links


About Andrew
About Paul
Cookie Policy


Free eBook
Free Risk Calculator
Are You New to Trading Forex?
Are You About To Give Up Trading?
30 Minute Forex Trader Update
Online forex video course
One on One Coaching in Person
One on One Coaching – Online
© 2020 The Forex Trading Coach Ltd (NZ FSPR:FSP37396) provides general information and educational courses and materials only. This is not an offer to buy/sell financial products. We do not provide personal advice nor do we consider the needs, objectives or circumstances of any individual. Financial products are complex and all entail risk of loss. Over-the-counter derivative and foreign exchange products are considered speculative because they are highly leveraged and carry risk of loss beyond your initial investment, hence should only be traded with capital you can afford to lose. Please ensure you obtain professional advice to ensure trading or investing in any financial products is suitable for your circumstances, and ensure you obtain, read and understand any applicable offer document.

Latest Podcasts / Videos

#377: Will the US Dollar Fall Over the Next 12 Months?

Will the US Dollar Fall Over the Next 12 Months?  Podcast: #377: Will the US Dollar Fall Over the Next 12 Months? In this video: 00:26 – A great question from someone on my webinar 01:12 – Some examples from the last 17 years 02:09 – The EUR/USD got very...

#376: Where to Invest Today?

Where to Invest Today?  Podcast: #376: Where to Invest Today? In this video: 00:24 – My latest bank statement 01:07 – What are your options? 02:06 – Continuing to do what we’ve always done 02:21 – Client from Germany making 2.5% to 4% per week 03:45 – The...

#375: The Power of a Good Trading Community

The Power of a Good Trading Community  Podcast: #375: The Power of a Good Trading Community In this video: 00:27 – Amazing trading results and the power of a good trading community 01:27 – Trading can be a lonely business 02:13 – You get to associate with...

#374: How to Calculate Your Lot Size Correctly & Easily

How to Calculate Your Lot Size Correctly & Easily Podcast: #374: How to Calculate Your Lot Size Correctly & Easily In this video: 00:26 – Understanding Lot Sizes 00:58 – The problem with the way most people trade 01:57 – Different pairs pay a...

#373: I’ll Take You on a Helicopter Trip

I’ll Take You on a Helicopter Trip  Podcast: #373: I’ll Take You on a Helicopter Trip In this video: 00:29 – Let’s go flying but first we need to prepare 02:22 – Pre-flight completed and trading completed 03:36 – Experience some of the amazing...