There are several ways of making money trading forex. You can make money by trading breakouts, scalping, swing trading, hedge trading and countless others. There are also different ways on how to do this. The majority like to use indicators like Stochastics to guide them when to open and close a trade. This is also the reason why 95% of people fail to make money trading forex.
It's not that there aren't people that are having success trading Stochastics, but the majority fail. There is a very good reason for this. Nobody has a clue what Stochastics has to do with the actual price action of currencies. Sure, anybody can follow "the rules" of trading Stochastics, but if you want to be part of the 5% of traders who are having success with forex, then you need to dig a little deeper.
If you can understand price movement, you can understand trading forex. The charts don't lie, even though some of the indicators might. With price action you can spot support and resistance points, (the real ones, not the indicator ones) breakout points, time targets, and so much more.
It may seem complicated but it's really not. It's all a question of price patterns. Every currency in the forex market has specific price patterns that can be used to forecast the future price. This is what is meant by understanding the market, and this is how the pros use the knowledge of price to make money trading forex. Stochastics or any other lagging indicators will not going to give you that kind of insight.
Jim Buhs has been a successful forex trader after learning how to trade price action. Once he understood that all he needed to trade forex successfully was on a plain chart with no indicators, his profits soared.
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