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Forex Trading Using Scientific Theories

Knowing how profitable forex trading can be, many traders and investors turn to scientific theories in a bid to make money. Since forex trading is all about money and money is about numbers, it would be logical for people to think of the forex market as a numbers game. However, facts show that there's nothing scientific with forex trading to start with.

Forex trading can be considered as an art, but not a science. Unlike physics or chemistry, forex trading is not an exact science. If forex markets are scientific in nature, then it would be easy for anyone to predict the ebb and flow of currency values, and currency markets would cease to exist.

Forex trading is just like gambling in the sense that you are betting on the strength of a particular currency in relation to another currency. You cannot accurately predict the currency value a day, a week or a month from now. However, just like in gambling, you can enhance your chances of success by using your skills and strategies in forex trading.

Knowing that scientific theories are not accurate when it comes to forex trading, it is wise not to rely too much on these theories. However, it is not a bad idea to use scientific theories in forex trading, as long as they don't make you stray away from better, more reliable trading information and principles.

One of the most popular scientific theories used in forex trading is the Elliot Wave. Although the Elliot Wave can be classified as a scientific theory, it is also subjective in nature. So when you use this theory, you have to decide the right things to do based on the information available.

The Elliot Wave may have helped many forex traders make money, so it quite ironic that its discoverer died poor! If you are interested in the Elliot Wave theory and how it can help you make profitable trades, you can look for forex websites that advocate the Elliot Wave and other scientific theories.

Another scientific theory that can be used in forex trading is the Fibonacci number series, which maintains that markets retrace by percentages. This theory is an objective one but does little to help you gain profits. It is interesting to know that the Fibonacci series was first developed to find out the growth rate of the rabbit population!

Should you use scientific theories in forex trading, make sure that they are based on solid, proven and tested principles and not just some odd formula devised by greedy people. There's no harm in using scientific theories in forex trading, as long as you know their advantages and disadvantages as well as their risks and benefits.

The important thing to remember in forex trading is that it's impossible to win in every trade. To make a decent profit from forex trading, you must win more trades than you lose. Scientific theories may or may not work in forex trading, but just rely on proven and tested strategies and you will be alright.