Most successful traders in Forex are those who easily can identify the price trends and patterns. Making profit by trading currencies is not that hard actually once you learn to see the trend of price movement. Your task becomes simply taking the trades along the current trend.
The beauty of the trend identifying skill is that anyone can learn it very quickly. Since it is easy to point the direction of the price movement the identifying the trend is also quite simple. Any time frame will work. However the trend is most clearly seen on higher time frames.
Traders use different approaches to identify the trend. I personally use most simple ones. For example on 15 minute chart I apply an EMA with averaging period of 96. That covers 24 hours. An EMA pointing upwards shows me that the trend is up. An EMA pointing downwards show that trend is down.
However you can encounter a flat market from time to time. That is when price is bouncing up and down horizontally between two levels. In this case the upper level is resistance and the lower one is support.
Having a flat market condition may indicate that there is a break out is coming. When price breaks out that range it will go upwards or downwards creating a strong trend. And that is a good opportunity to enter the market.
Another good way to use the sideways market is to take scalping trades. Even though I'm not a big fan of scalping there are many traders who successfully make such trades. You take a short trade when price approaches the resistance level and exit at the support level. Then you make a long trade at the support level and exit when price approaches the resistance level.
Whatever strategy you use to trade currency remember that you need to thoroughly test your system. Use back testing as well as forward testing on a demo or even better on a small live account. Also keep in mind that there is no such thing as a 100% wining system. The most profitable system will give you the loosing streaks from time to time. You need to understand the risks before going with your trading system to trade real money.
Once you learn to identify the trend by whatever method you chose you can become a profitable trader. However you need to always remember to be objective when you identify the trend. It is especially hard to be objective when you have an open trade with your real money.
You may ask what being objective or not has to do making profit in Forex. The answer is simple. Some traders hesitate to take a trade and assume that the trading setup is not completely formed. Other traders hate to wait for the setup to completely form and they jump into the market even when slight opportunity is present. That's the reason you need to have a strong self control and objectivity in market analysis.
