Professional Traders Don’t Forecast
Despite what many retail account holders think, professional traders don’t forecast. The pro’s know that on any given day a market can correct, and that correction can turn into a reversal. For some speculators this may be cause for concern, not for a trader. Traders don’t forecast.
If a professional can definitively tell you the current trend, then by definiton she can tell you at what point in price and time that trend changed. She can point to the very candle or bar which produced the set-up that provided the level which price moved beyond to produce the change/reversal. That definition is what lends the trader confidence in the decision making process and what makes forecasting, like opinions, unnecessary, and even a liability. What the professional understands is that technically she is not making the decision, the market is. The market, through it’s highs, lows, and closing prices provides the framework which defines the critical levels that are the set-ups for coming directional changes. The trader just determines which time frame she is going to heed those changes on.
To see Jay Norris point out trade set-ups and signals in live markets during U.S. day session and evening hours go to Live Market Analysis . Jay is Chief Market Strategist at IBTRADE, and the author of Mastering the Currency Market, McGraw-Hill, 2009 and Mastering Trade Selection and Management, McGraw-Hill, 2011.
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential that changing political/economic conditions may substantially affect the price/liquidity of a currency. Investors may lose all or more than their original investments.