![]() If you have spent any time trading Forex or reading different analysts online, you can see that different traders see the same differently. How can this be? Video Transcription: Hey traders, welcome to Video 2 of the Advanced Forex Strategies Course, this is Cory Mitchell. In this video we are looking at understanding forex charts. Brought to you by Investoo.com. There are many reasons why different traders see things in different ways, and in this article I’ll take a look at some of the most common causes of this phenomenon. Bias One of the biggest problems that traders have is that they go into a market with a bias. For example, you may believe that the euro isn’t going to be around in 20 years. If you believe this, you will probably approach the pair with a negative bias under most circumstances. Unfortunately, the markets don’t care what you think about 20 years down the road, as they are focusing on what is happening right now. However, if you have but ultimately negative bias it will skew your trading decisions, unless you are willing to let it go. Most people aren’t, and this could be problematic. For example, even if the euro were to go down to zero, there would be several bounces along the way, perhaps even weeks at a time. I once had a friend who was very negative, ahead of the financial crisis a decade ago. While he was ultimately correct, he started trying to short the USD/JPY pair in late 2004. Euro Dollar Forex ChartI have no idea how many Forex accounts he blew up, because he thought that the carry traders were wrong. They were trying to earn the interest daily, and that was a trade that lasted for several years. Forex Us DollarDesignation of currency forex. Although fundamentally he was correct, he had to endure a lot of pain for years because of his bias. Time frames Another thing that can greatly influence how different traders see the same Forex charts differently is that they may be working with different time frames. For example, a scalper isn’t worried about where the Australian dollar is trading against the US dollar for more than the next few moments. However, a would be much more interested in weekly support. A swing trader might understand that a 100 pips stop loss in the big scheme of things is nothing, but he also has a different focus and most certainly a different position size than somebody who is scalping the one minute chart.
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