- I have now been hearing many people saying that Forex trading is risky must be person can lose a fortune in trading Forex. Using one hand, this might be good news because it has somehow deterred some folks from trading Forex particularly when they are not prepared to have proper education to learn how to trade well. On one other hand, many people are determined to offer Forex trading a decide to try, 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 could be a successful venture but we must treat it as a significant business and not a quick to be rich scheme. What this signifies is that people must understand different segments of a Forex trading business. These are trading strategies, money management and trading psychology. In this short article, I will concentrate on the first segment - trading strategy.
- stockoption trading
I still find it fair to express that all 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 just a quick to be rich scheme, they don't have the patience to do the necessary work. Instead, their primary goal is to consider the most profitable strategy so that they'll make money in the shortest time possible. My question is whether there's such a thing called the most profitable trading strategy. I am aware by asking this question, I am inviting a debate here since there are a large number of Forex strategies obtainable in the market. Every one of you'll come up with your personal opinion. If I might, i'd like 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.
I know very well what I am going to express below will disappoint a few of you - there's no such thing called 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. In that case, we have to utilize trend strategies because it doesn't seem sensible to use trading range strategies. Conversely, if the currency pair has formed a trading range, it doesn't seem sensible to utilize 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 number of my trading buddies would rather trade the Forex market predicated on news. What they do is to consider the headlines 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 derived from a chart on a diminished time frame.
- optionstock trading
Finally, exactly why breakout strategies exist is since there are traders who would rather have a position on a currency pair after it breaks out of a trading range.
As you can see, different traders could have different trading preference. First thing I believe you need to do is to learn your personal preference. Are you currently someone who is ultra conservative and you may not want to risk much in a trade? Or are you currently someone who is aggressive and it is okay for you really to cope with higher risk investments?
Even though I mentioned news trading strategies here, I do not trade any of them personally because they don't fit my trading personality. I am more or less concentrating on both trend strategies and trading range strategies.
Here is another important point for you really to consider if you're learning any strategy from another person. I am certain that the individual from whom you learn could have their own trading rules. You've to ensure that these rules fit your personal trading personality. If not, it is probable this strategy will not meet your needs although it works for that person. If you determine to tweak these trading rules to suit your preference, you need to be prepared to spend time on back-testing and forward-testing the modified strategy to ensure that it generates good results consistently.