Reading books on technical analysis provides essential forex trading education

Forex trading is an art, a science and also a game, which takes years to master, through continuous education and reading many books. Although all the information you need to trade is free, using technical analysis to time your trades and be on the winning side most of the time is a skill that takes quite a few years to acquire. Patience and willingness to commit yourself to a lifetime of learning is what makes the difference between successful traders and those who fail.

Although learning how to trade can be greatly accelerated by a mentor, the bedrock of knowledge that is required to trade successfully can only come through reading good books. In particular, most forex traders are short term traders who rely upon technical analysis mostly to make all their decisions about buying and selling the different currency pairs. Technical analysis is about using past price action to make educated guesses about the future direction of the market. While there is some argument about whether it works or not, it must be realized that the very fact that most traders utilize it to make their trading decisions makes it a valuable tool. For instance, there are 'resistance' and 'support' points at which prices often bounce or break through because irrespective of them being right or wrong, large groups of traders simultaneously regard them as important turning points.

Moreover, patterns that have happened before can happen again, and they do ! Because human beings collectively often behave in similar fashions, and markets are nothing but humans making buy and sell decisions, in real-time. One of the biggest advantages of reading books on technical trading is that the books summarize years of observations by trader about how the trading crowd behaves at key moments in the market.

On the other end of the spectrum, supporters of the 'random walk theory' believe that markets are totally random and unpredictable. The trouble with this theory, apart from the fact that it is impossible to be proved correct, is that it effectively keeps you out of the market and denies you a chance to make a decent living and even large sums of money from the biggest money making opportunity in the history of the human race - the foreign exchange market !