I have been hearing many people saying that Forex trading is risky because a 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 particularly when they are not prepared to obtain proper education to learn to trade well. On another hand, many people are determined to provide Forex trading a take to, as they've been told it is just 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 didn't 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 just a quick to be rich scheme. What this means is that individuals must understand the different segments of a Forex trading business. They're trading strategies, money management and trading psychology. In this short article, I will concentrate on the initial segment - trading strategy.
I believe that it is fair to say that Forex traders will first learn trading strategies in this business before they consider another two segments. However, as many people take the view that Forex trading is just a quick to be rich scheme, they cannot have the patience to complete the required work. Instead, their primary goal is to look for probably the most profitable strategy so that they can make profit the shortest time possible. My question is whether there is such a thing called probably the most profitable trading strategy. I know by asking this question, I'm inviting a debate here since there are thousands of Forex strategies available in the market. Every one of you'll come up with your personal opinion. If I may, allow me 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. what are stock options
I know very well what I'm going to say below will disappoint a number of you - there is no such thing called probably the most profitable trading strategy. As traders, our job is 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 doesn't sound right to use trading range strategies. Conversely, if the currency pair has formed a trading range, it doesn't sound right to apply any trend strategies. Therefore, we have to use trading range strategies. Simply speaking, a trader must learn one or more trend strategy and one trading range strategy.
A few of my trading buddies choose to trade the Forex market predicated on news. What they do is to look for the headlines to trade and consider how a particular currency pair will react after the announcement. Typically, news trading strategies would have been a quick scalp on a currency pair and are based on a chart on a diminished time frame.
Finally, exactly why breakout strategies exist is because there are traders who choose to have a position on a currency pair after it breaks out of a trading range.
As you will see, different traders could have different trading preference. The first thing I believe you must do is to learn your personal preference. Are you someone who's ultra conservative and you don't prefer to risk much in a trade? Or are you someone who's aggressive and it is fine for you to cope with higher risk investments?
Even though I mentioned news trading strategies here, I don't trade any of them personally because they cannot fit my trading personality. I'm just about concentrating on both trend strategies and trading range strategies. trading strategies
Here's another important point for you to consider if you should be learning any strategy from another person. I'm sure that anyone from whom you learn could have his own trading rules. You've to ensure these rules fit your personal trading personality. Or even, it is probable that this strategy won't do the job even though it works for that person. If you decide to tweak these trading rules to suit your preference, you must anticipate to spending some time on back-testing and forward-testing the modified strategy to ensure it generates positive results consistently.