Finding a forex strategy is not a simple task. It will depend on many different factors that have to be tailored to the individual trader.
The first question that you have to ask yourself is, what do you want to get out of forex trading?
Are you an investor or a daytrader?
If you are an investor, your goals might be longer term stability rather than short term profits. This means you must have a tight risk management plan and a larger fundamental grasp of what is happening with the currencies that you are investing in.
Fundamental trading strategies are most suitable for this type of trading.
If you are a daytrader, you might look for a way to take advantage of daily currency fluctuations regardless of the long term fundamentals. As a daytrader, a system based on technical analysis would probably be the most suitable system
Trading Psychology
No matter what your strategy for trading, the bottom line is that you need to feel comfortable with it. Always spend time testing your strategy out on a demo account. If you are taking a system from another trader, spend time analyzing their trading with the system. If the system you want to use is a technical system that you developed yourself, try backtesting the strategy with a program like metatrader.
Finding a forex strategy is a personal decision. Each trader uses their own discretion when it comes to executing trades. Results may vary between two traders using the same system. Take your time when deciding on trading methods and developing a system. The forex market isnât going to dissapear, it will still be there when you are ready to commit to live trading.
The better you understand the nuances of your trading system and the forex environment, the better your chance for long term success.
The first question that you have to ask yourself is, what do you want to get out of forex trading?
Are you an investor or a daytrader?
If you are an investor, your goals might be longer term stability rather than short term profits. This means you must have a tight risk management plan and a larger fundamental grasp of what is happening with the currencies that you are investing in.
Fundamental trading strategies are most suitable for this type of trading.
If you are a daytrader, you might look for a way to take advantage of daily currency fluctuations regardless of the long term fundamentals. As a daytrader, a system based on technical analysis would probably be the most suitable system
Trading Psychology
No matter what your strategy for trading, the bottom line is that you need to feel comfortable with it. Always spend time testing your strategy out on a demo account. If you are taking a system from another trader, spend time analyzing their trading with the system. If the system you want to use is a technical system that you developed yourself, try backtesting the strategy with a program like metatrader.
Finding a forex strategy is a personal decision. Each trader uses their own discretion when it comes to executing trades. Results may vary between two traders using the same system. Take your time when deciding on trading methods and developing a system. The forex market isnât going to dissapear, it will still be there when you are ready to commit to live trading.
The better you understand the nuances of your trading system and the forex environment, the better your chance for long term success.