trading strategies

I have already been hearing some people saying that Forex trading is risky because a person can lose a fortune in trading Forex. On one hand, this might be good news because it's somehow deterred some people from trading Forex specially when they're not prepared to have proper education to learn how to trade well. On the other hand, some people have decided to provide Forex trading a take to, as they've been told it is a quick to be rich scheme. Unfortunately, they lost their momentum because they might not find any profitable trading strategies and thus, they figured Forex trading did not work. trading strategies

With due respect, I submit that trading Forex can be a successful venture but we should treat it as a significant business and not just a quick to be rich scheme. What this implies is that people must understand the different segments of a Forex trading business. These are trading strategies, money management and trading psychology. In this informative article, I'll focus on the initial segment - trading strategy.

I believe that it is fair to express that most Forex traders will first learn trading strategies in this business before they consider the other two segments. However, as some people take the view that Forex trading is a quick to be rich scheme, they don't have the patience to complete the mandatory work. Instead, their primary goal is to find probably the most profitable strategy so that they can make money in the shortest time possible. My question is whether there's anything called probably the most profitable trading strategy. I know by asking this question, I'm inviting a debate here because there are a large number of Forex strategies obtainable in the market. Each of you will develop your personal opinion. If I might, i'd like to first group all Forex trading strategies into four major categories: (i) trend strategies; (ii) trading range strategies; (iii) breakout strategies; and (iv) news trading strategies.

I know what I'm going to express below will disappoint a few of you - there's no such thing called probably the most profitable trading strategy. As traders, our job is always to begin to see the chart of a currency pair and decide when it is in a trend. If so, we have to apply trend strategies because it does not sound right to utilize trading range strategies. Conversely, if the currency pair has formed a trading range, it does not sound right to apply any trend strategies. Therefore, we have to utilize trading range strategies. Simply speaking, a trader must learn a minumum of one trend strategy and one trading range strategy. stock options trading

A number of my trading buddies would rather trade the Forex market predicated on news. What they do is to find the headlines to trade and consider how a particular currency pair will react after the announcement. Typically, news trading strategies will be a quick scalp on a currency pair and derive from a graph on less time frame.

Finally, the key reason why breakout strategies exist is since there are traders who would rather take a position on a currency pair after it breaks out of a trading range.

As you can see, different traders can have different trading preference. The very first thing I believe you must do is to discover your personal preference. Are you someone who's ultra conservative and you don't want to risk much in a trade? Or are you currently someone who's aggressive and it is okay for you really to handle higher risk investments?

Even though I mentioned news trading strategies here, I do not trade some of them personally because they don't fit my trading personality. I'm just about focusing on both trend strategies and trading range strategies.

Here is another important point for you really to consider if you're learning any strategy from another person. I'm sure the individual from whom you learn can have his own trading rules. You have to ensure that these rules fit your personal trading personality. If not, it is likely that this strategy won't work for you although it works for that person. If you choose to tweak these trading rules to accommodate your preference, you must anticipate to spend some time on back-testing and forward-testing the modified strategy to ensure that it generates excellent results consistently.

Comments