Having a good forex trading strategy is a must for every wannabe successful trader.All traders at every level from investment firms and fund managers to the likes of you and me will use some kind of strategy. Why? Well if not it would be like driving with your eyes closed, you can't see the direction and at some point it's going to end up in a car wreck!
On the other hand a well thought of and executed trading strategy will help you make a wiser investment decision which will have a far great chance of making a profit.
A forex trading strategy/trading plan will have set parameters, rules that a trader will live by and never deviate from. A good trading plan will have been developed and tested over time to prove it's worth. This is called back testing. Back-testing is taking your strategy/plan and applying it to historical technical data. When doing this you will be able to see just how your strategy would have worked out if you have had traded. However just because it did or did not work out for you in the past does not guarantee that the same would happen in the future, but as the market tends to repeat itself the chance are that it might. So although it's not perfect back-testing is an accepted approach to researching your strategy.
Remember that you will need a lot of discipline to stick with your strategy even at times when you are tempted to deviate from it by the lure of greater gains or moving your stop loss order "just this once". DON'T!!! It's part of all of us to think we can push the boundaries and get away with it; this can be a very expensive attitude to have in the forex world. If your strategy works for you then stick with it without exception and you will reap the benefit.
We are going to take a look at a few basic trading strategies here.
Moving average cross over
Price crossing moving average
Support and resistance
I hope that you have seen by now that there is much more to being a successful online trader then just is the market going to go up or down today. There are many things to consider before making a trade and we hope to help prepare you for a profitable trading career.
However we are not so big headed to believe we are the fountain of all knowledge and as such we would always like to invite experienced traders using our site to help teach the not so experienced or successful
Have you a successful trading strategy?
Found a trading strategy that has been successful over a period of time? Share it!
Why not help other traders on this site benefit from your knowledge and experience.
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