Which Is The Most Profitable Forex Trading Strategy You Must Learn?

I have been hearing some people saying that Forex trading is risky because a person can lose a lot of money in trading Forex. On one hand, this may be good news because it has somehow deterred some people from trading Forex especially when they are not prepared to get proper education to learn how to trade well. On the other hand, some people have decided to give Forex trading a try, as they have been told it is a quick to be rich scheme. Unfortunately, they lost their momentum because they could 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 a successful venture but we must treat it as a serious business and not a quick to be rich scheme. What this means is that we must understand the different segments of a Forex trading business. These are trading strategies, money management and trading psychology. In this article, I will focus on the first segment – trading strategy.

I believe it is fair to say that all 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 do not have the patience to do the necessary work. Instead, their primary goal is to look for the most profitable strategy so that they can make money in the shortest time possible. My question is whether there is such a thing called the most profitable trading strategy. I know by asking this question, I am inviting a debate here since there are thousands of Forex strategies available in the market. Each of you will come up with your own opinion. If I may, 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 know what I am going to say below will disappoint some of you – there is no such thing called the most profitable trading strategy. As traders, our job is to see the chart of a currency pair and decide if it is in a trend. If so, we have to apply trend strategies because it does not make sense to use trading range strategies. Conversely, if the currency pair has formed a trading range, it does not make sense to apply any trend strategies. Therefore, we have to use trading range strategies. In short, a trader will have to learn at least one trend strategy and one trading range strategy.

Some of my trading buddies prefer to trade the Forex market based on news. What they do is to look for the news 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 are based on a chart on a lower time frame.

Finally, the reason why breakout strategies exist is because there are traders who prefer to take a position on a currency pair after it breaks out of a trading range.

As you can see, different traders will have different trading preference. The first thing I believe you must do is to find out your own preference. Are you someone who is ultra conservative and you do not like to risk much in a trade? Or are you someone who is aggressive and it is fine for you to deal with higher risk investments?

Even though I mentioned news trading strategies here, I do not trade any of them personally because they do not fit my trading personality. I am more or less focusing on both trend strategies and trading range strategies.

Here is another important point for you to consider if you are learning any strategy from another person. I am sure that the person from whom you learn will have his own trading rules. You have to ensure that these rules fit your own trading personality. If not, it is likely that this strategy will not work for you even though it works for that person. If you decide to tweak these trading rules to suit your preference, you must be prepared to spend time on back-testing and forward-testing the modified strategy to ensure that it generates positive results consistently.

I hope you realize that in order to be a successful Forex trader, you will never shop around for the so-called most profitable strategy because it does not exist. You will find a strategy that fits your trading personality if you are prepared to spend time to research and test the strategy. And when this strategy works for you, you have the right to say that this is a profitable strategy for you.

Online Forex Trading Strategy – How to Make Currency Trading Systems Work For You

Now that there are hundreds of Forex margin brokers, millions of free Forex trading tips webistes and literally hundreds of thousands of Forex day trading strategy “home based business” Forex traders, we can say that virtually anyone with an internet connection can trade Forex with the pros.

In any power trading strategy, a proven trading method will mean that through Forex strategy testing and by using trading risk management, no more than one or two per cent of a total account value is put at risk in a single trade. This is key in the path to big Forex profits. Any trader beginning out will look at the trading methodologies available to them and decide to create trading rules for their Forex trading strategy.

Forex trading (currency trading) initiates should be aware therefore not only of technical and fundamental analysis and predicting Forex prices, but also of how to be a trading strategy tester and to have strong Forex trading rules that help them to make the big Forex profits they are seeking. The alternative is to have more experienced Forex trading systems used by more experienced traders end up causing you to lose all your money in your Forex business – the harshest possible outcome.

Having the following in place could assist you in getting started right away in Forex trading (currency trading): a Forex trading software platform; a free Forex trading strategy (or a paid for one for that matter); an understanding of fundamental and technical analysis and a trading risk management system. From these elements (and also the support of a daily Forex strategy briefing from a margin broker or some other site) you can start Forex trading in the fx market with your own Forex trading strategy rules.

Learning currency trading online needs to begin with sound trading risk management and how to manage your trading account balance by making intelligent risk decisions with your trading account. The risks can be higher with Forex because the moves in a week can be equivalent to a month in stock moves. Volatility is to be expected.

Currency trading strategy rules for a Forex business can be developed by amalgamating Forex trading systems of others or simply garnering a Forex education to include: fundamental and technical analysis; trading money management (risk management); a daily Forex strategy briefing from a “third party” and a way of creating Forex forecase signals (in other words a means of predicting future Forex prices from perhaps a technical setup on a currency pair or simply from Forex strategy testing that has been carried out.

Forex strategy testing can either be done through using a practice account through your broker or by paper trading your strategy. A third option is to use software such as Forex strategy tester which can run a simulation of what could happen if you trade by your rules with some limitations on accuracy.

Free Forex trading strategy tips are available from Forex ebooks webistes all over the web. The truth is that the Forex trading fx market needs to be treated as a business that runs like a Forex trading machine as much as possible. This is key if you are to make big Forex profits in live trading. Lack of regulation means that anyone can sell a “scalping trading strategy” or so-called “foolproof trading method” and make themselves out to be an expert or even say they are a long term bank trader when they are not. There is a need for caution therefore when deciding on where to get your Forex education because not any Forex trading guide is actually going to help in your predicting Forex prices in the near, medium or long terms.

It behooves you to go out and look at what is on offer from Forex trading websites and learn more about the global currency markets after you have read this article. Some sites are listed in the resource box at the end to start you off. Trading Forex online then presents challenges. The rest of this article will address those challenges. In order to trade effectively, a Forex trading guide is needed for the initiate in to the Forex markets to be able to learn online currency trading, understand trading risk management and how to manage money, discover technical and fundamental analysis, how these types of analysis of the market differ and how to apply them in creating a Forex trading machine.

This means that after all the cogs are set in place you will have a Forex trading machine that enables you to its like a professional and make decisions based in the moment and on the facts that are presented to you, rather than guess or gambling work – although there is invariably an element of risk, your job is to eliminate the risk as much as possible in applying your trading strategy.

To make this happen, you will start to think about what you may need in order to implement your trading strategy. For example, will you be needing a daily Forex strategy briefing from either a paid service or a free provider of its strategy briefings – such as perhaps your broker or a third party service. In your technical analysis will you be utilising traditional indicators such as those involved in a bands trading strategy (Bollinger Bands), will you rely on charts created by a its platform or other currency price forecast type service or will you be professional analyst charts to make your decisions?

A proven trading method is hard to come by. There are educators who have been trading Forex for banks and other institutions for many years. However they are still going to find it incredibly difficult to pass on their years of knowledge, at least not in the time most people want to go from knowing nothing about Forex trading (currency trading) to being an expert and making money with its as a business.

In sum, it is multidimensional. There are several aspects of absolute importance. These include strategy, both in terms of trading and money management, education – both initial and ongoing and focusing in on mastering a specific area whether that be a particular currency pair or aspect within the field – such as global economics of a particular country.

The Four Keys of Identifying Winning Trading Strategies

Most traders are on a constant quest to discover winning trading strategies. And yet, very few Traders are ever able to find and successfully implement these winning trading strategies.

Why is that? What is it that is so elusive about these winning day trading systems and strategies? Where can you go as a Trader to find the most powerful and accurate winning trading systems and strategies available?

The fact of the matter is that most well-thought-out day trading systems and strategies can and should be winning day trading strategies IF the Trader has discipline – both in following the day trading strategy exactly, and also in sticking with the trading strategy.

Yet it seems that most day traders will try what should be a winning trading system or strategy just once or twice, and if it doesn’t immediately yield positive results, these traders quickly abandon it and move on to the next “hot trading tip”.

And these same Traders wonder why they can NEVER create consistent Day Trading success – why they can never lock in on that one winning trading strategy.

To help you along on your quest, we’ve created a four-step punchlist for you to follow as you continue your quest to identify winning trading strategies. Pay close attention to this list – it could be the “game changer” you’ve been looking for as a Day Trader.

The Four Keys To Identify Winning Day Trading Strategies:

1. Keep It Simple, Stoopid! The best day trading systems and strategies are also the easiest to learn, understand, and master. The more complicated a trading strategy (and believe me, in the world of technical analysis, there are PLENTY of ultra-complicated trading strategies), the less like you’ll ever be able to turn it into a winning trading strategy for yourself.

When looking for winning trading systems or strategies, find those that are simple, easy to execute, and that don’t require an advanced degree in statistical theory to comprehend.

2. Speed Is Your Best Friend. The longer you’re in a trade, the more time there is for something to go wrong. When searching for those elusive Winning Trading Strategies, find one that allows you to be in and out of a trade very quickly (my average trade lasts less than one minute).

Find day trading systems that don’t focus on “long term” trading (i.e. anything longer than a few minutes) – it’ll be better for your trading account AND your stress level.

3. Don’t Be A Stock Chart Zombie. Most (nearly all) trading systems or strategies require you to spend hours and hours a day chained like a slave to your computer, making trade after trade after trade, all…day…long. Is that really the life that you’re looking for? Wouldn’t it be better to be in, out, and on with your day?

In fact the slogan “get in, hit your target, get out…like you were never there” is speaking directly to this idea. The problem is that MOST trading strategies require you to watch for indicators that will “predict” when market movement will happen, and also which direction to enter the trade.

Wouldn’t it be easier, and flat-out BETTER, if you already knew exactly when market movement was going to happen, and then how to take advantage of that movement? Couldn’t you significantly reduce your trading risk if you had these three factors in your day trading arsenal? The less time you have to spend executing a winning trading strategy, the more like you will be to maintain your discipline as a Trader. Speaking of…

4. Maintain your discipline. No matter what day trading system or strategy you ultimately decide on, discipline is absolutely 100% necessary for you to become a successful trader. You MUST maintain your discipline as you execute your chosen strategy, and also as you keep working at perfecting it.

Lack of discipline has perhaps ruined more would-be Traders than any other flaw. Even as an experienced Trader, I sometimes find myself growing impatient with my own trading system (even though these strategies that I use develop almost instantly and I’m usually in a trade for less than a minute). And its when I veer off course of these winning trading strategies that I find myself limiting my profits, or even turning winning trades into losing trades.

As a day trader, there is no characteristic more important in your trading practices than the ability to exercise a high level of discipline. And ironically, there is no trading skill that is harder to master than unbending, unyielding discipline. It’s something of a Day Trading paradox. But its also a real trading skill that you MUST master if you are going to ever achieve consistent day trading success.

So there you have it – the four keys of identifying winning trading strategies. Of course, not all trading systems are created equally…and if you’re going to achieve day trading success, it’s on YOUR SHOULDERS to identify those day trading systems and strategies that will give you the greatest chance of success.