I have already been hearing many people saying that Forex trading is risky must be person can lose a fortune in trading Forex. On a single hand, this might be good news because it has somehow deterred some people from trading Forex specially when they're not prepared to obtain proper education to learn to trade well. On one other hand, many people decided to offer Forex trading a take to, as they have been told it is really a quick to be rich scheme. Unfortunately, they lost their momentum because they may not find any profitable trading strategies and thus, they concluded that Forex trading did not work.
With due respect, I submit that trading Forex can be quite a successful venture but we ought to treat it as a critical business and not a quick to be rich scheme. What this implies is that individuals must understand the various segments of a Forex trading business. They're trading strategies, money management and trading psychology. In this short article, I will focus on the first segment - trading strategy. trading strategies
I still find it fair to express that most Forex traders will first learn trading strategies in this business before they consider one other two segments. However, as many people take the view that Forex trading is really a quick to be rich scheme, they do not have the patience to do the necessary work. Instead, their primary goal is to find probably the most profitable strategy so that they may make profit the shortest time possible. My question is whether there's such a thing called probably the most profitable trading strategy. I understand by asking this question, I am inviting a debate here because there are thousands of Forex strategies obtainable in the market. All of you will develop your own opinion. If I could, let me 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 understand what I am 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 see the chart of a currency pair and decide if it's in a trend. If that's the case, we have to use trend strategies because it generally does not make sense to make use of trading range strategies. Conversely, if the currency pair has formed a trading range, it generally does not make sense to use any trend strategies. Therefore, we have to make use of trading range strategies. In a nutshell, a trader must learn a minumum of one trend strategy and one trading range strategy.
A number of my trading buddies would rather trade the Forex market predicated on news. What they do is to find the news to trade and consider how a particular currency pair will react following the announcement. Typically, news trading strategies is a quick scalp on a currency pair and are derived from an information on less time frame. stock options trading
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 will see, different traders can have different trading preference. First thing I think you need to do is to discover your own preference. Are you currently someone who is ultra conservative and you may not like to risk much in a trade? Or are you currently someone who is aggressive and it is fine for you yourself to handle higher risk investments?
Although I mentioned news trading strategies here, I do not trade any one of them personally because they do not fit my trading personality. I am pretty much concentrating on both trend strategies and trading range strategies.
Here is another important point for you yourself to consider if you are learning any strategy from another person. I am sure that anyone from whom you learn can have their own trading rules. You have to ensure that these rules fit your own trading personality. If not, it is probable that this strategy will not do the job even though it works for that person. If you determine to tweak these trading rules to accommodate your preference, you need to be prepared to spend some time on back-testing and forward-testing the modified strategy to ensure that it generates good results consistently.