The Six Forces of Forex

ABOUT THIS REPORT 
The Forex Report is a periodic publication that investigates advanced strategies 
for superior trading performance in the foreign exchange markets.  These 
reports utilize advanced statistical and econometric modeling techniques to 
create new insight into the trading strategy of the average trader.  This report, 
The Six Forces of Forex, is a more general report intended for all audiences, 
including those new to the forex market. 

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THE SIX FORCES OF FOREX 
Trading forex is like watching a school of fish move.  One minute is total 
harmony, the next, complete chaos.  As the observer of this school of fish, 
do you believe you can accurately predict the direction the school of fish 
will move each time?  Would you bet on it? 

What causes the fish to move the way they do?  Why do they work together 
in one moment, moving with force and precision, and move in what seems 
to be an infinite number of directions the next?  There’s no way to know 
unless you can sense what the fish sense each time they move.  The fish 
have an instinct about the nature of their environment.  They understand 
the context of all things around them – natively – and can react 
accordingly.  Surely if you shared this understanding you’d be a much 
more accurate predictor of fish movement! 

Trading forex is not much different - we need to develop that keen sense of 
what is happening around us.  Will we ever be able to predict every move 
in the forex markets?  Absolutely not.  But we can use our understanding 
of the context of the market – the six forces of forex – to make better, 
more profitable trading choices.  Once we understand these forces, we can 
create and operate within a comprehensive trading plan: 

ƒ  Who trades forex?  Understand who participates in the markets, 
why they are successful, and how you can emulate them. 

ƒ  Why trade forex?  There are superior returns in forex, but not for 
all investors.  Are you one of them?