Forex Trading: Forex Trading Is Like Cooking...

In many ways, we can relate Forex trading to cooking.

In order to whip up a perfect dish, we need to have the right ingredients and tools as well as skills to cook the dish.

Any slip up with the ingredient will deter the taste.

The use of a wrong tool or machine while preparing the dish might spoil it.

When you think about it, this is the same in Forex trading.


Here is a short article from Russ Horn picturing Forex trading with cooking...


Think of a trading system like cooking.

Too many times I am seeing traders piling on the indicators to what started out as a simple and effective trading system.

The end result is supposed to be rock-solid conformation of a trade, but inreality what you end up getting is a confusing and counter productive mass of lines and squiggles that make no sense at all.

In a conversation I had the other day, I suggested that you should look at the indicators of a trading system like the ingredients of something you would eat.

The trading system is the end result of your combined ingredients, like a pie or a steak would be to a cook.

The right ingredients with the right amounts will make a terrific baked good, just like the right indicators with the right settings will make for a profitable system.

As a chef or a cook, you will understand that ingredients on their own can be tasty, but mashing them all together isn't going to make for a tasty treat. Can you imagine chocolate chips, mayonnaise, lettuce and hot sauce combined into a cupcake... with a pickle on top.

No cook would ever do this, but traders will attempt to do exactly that with their trading systems. Taking several good indicators and applying them all isn't going to produce the super-system you think it will.

Reduce the number of indicators you use, and be sure they compliment one another. Indicators should look at the market in different ways.

For example, you can use a MACD and a Stochastic together, they look at the market very differently. Start with a max of 3 indicators, enough to give you a clear picture of the market, but not so much that things get confusing or trades signal get so delayed that you enter at the end of a trade.

Limit your "Trading Ingredients" and you will be much better off because of it.



happy trading,

Yours sincerely,




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