How Different Trading Terms Can Mean The Same Thing

How Different Trading Terms Can Mean The Same Thing

Ten times out of 10, the Forex community uses different terms to say the same old thing. An advanced trader can say the same thing as a beginner, but in a completely different way. For example, supply and demand have many other terms.

Early on in my trading career, I asked a trader who worked for a prominent hedge fund in South Africa what his trading style was, and he said, “I trade order blocks.” To this response, I had no words because, at the time, I didn’t know what it meant. Until my friend said I should ask him what that meant, so I did.

He explained and to be honest, I left that conversation more confused than ever, only to realize later that it meant the same thing as supply and demand, so I could trade them similarly.

It was essential to recognize that as I grew in my understanding of different terminologies, it didn’t mean my trading would drastically change. There are little nuances that make these terminologies different in how traders perceive them on the charts, and people interpret their meanings differently.

My only advice in this would be that you don’t get lost in the sauce. Don’t get lost in terminologies, and certainly don’t look everywhere to better your trading.

Remember that too much of something can also be bad for you. If you are used to a particular style of trading and a specific language, it is best to stick to what you know. Learn, but don’t allow the learning to consume you.

Traders usually use the term order blocks in hedge funds, banks, and other institutions to determine the area with the most liquidity for them to enter or get out of positions. You do not have to understand every term out there. The simpler your trading, the better it is for you.

So if there were any pointers to take away from this, they would be;

  1. Don’t try to learn from every Forex mentor out there (especially if their trading styles are different).
  2. Learn the terminology but don’t allow it to cripple you.
  3. Trading styles are unique to each trader, even if the foundational basics are the same.

 

Always remember less is usually more in trading.

Happy trading fellow Forex traders! 

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Emmanuel Maphosa

Emmanuel Maphosa

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