The key to success in forex is building a trading system that suits your needs and forex strategies that fulfil your goals. So the first thing a trader needs to be absolutely clear about is "What is my goal?" Clearly and specifically define your goal. To make loads and loads of money is a Forex dream not a forex goal. "How much money?" and "How fast do I want to make money?" are the first basic questions you need to ask yourself to figure out what you want from the Forex market. Based on these two answers, strategies can be classified as Investment Based Strategies and Day trading Based Strategies.Investment Based Strategies If you plan to stay and trade in forex for a longer period of time and your goal is more than short term profits, your strategies have to be investment oriented. These strategies will give you long term financial stability and consistent revenue over time. Risk management is the key in these forex strategies. You need to have a wider grasp about currency trading and fundamental trading strategies which are more complex than simple trading strategies are suited for investment based trading systems.Day Trading Based StrategiesDay trading strategies focus on making profits from the intra-day currency fluctuations without taking into account the long term market trends. These rely heavily on technical analysis and forex software systems. Choosing a forex strategy is matter of personal discretion. You can use existing strategies or create your own strategies. The aim should be to build a good profit generating trading system. No matter what strategy one may choose the three basic principles that must be upheld by your strategy are:Buy Low Sell HighThe patience to follow this fundamental rule will never fail to do you good. This can be done on any charting frame even daily and weekly spreads. Try and recognise the pattern of fluctuation in a currency pair. Place orders when the rates are in lower range and take profit orders when the rates are at the highest. Then patiently wait. Patience is the key in trading.Money ManagementManaging your money well means taking care of all possibilities. Risk only as much as you can afford to lose. Extreme leverage is a bad idea. Start with minimum amounts and always use demo-accounts for testing and learning whether it is a new trading system or forex software.Emotional ComposureIndecisiveness, fear, greed, impatience and lack of emotional stability are common trading psychological pitfalls and can ruin even the best of strategies. Practice on a demo-account and risk management can help you keep these factors in control. Make sure you are comfortable with your strategy and are prepared for every possibility.The forex strategies you ultimately choose to work with should be technically sound and yet it should be the one you personally find convincing and most intuitive to use.
The key to success in forex is building a trading system that suits your needs and forex strategies that fulfil your goals. So the first thing a trader needs to be absolutely clear about is "What is my goal?" Clearly and specifically define your goal. To make loads and loads of money is a Forex dream not a forex goal. "How much money?" and "How fast do I want to make money?" are the first basic questions you need to ask yourself to figure out what you want from the Forex market. Based on these two answers, strategies can be classified as Investment Based Strategies and Day trading Based Strategies.Investment Based Strategies If you plan to stay and trade in forex for a longer period of time and your goal is more than short term profits, your strategies have to be investment oriented. These strategies will give you long term financial stability and consistent revenue over time. Risk management is the key in these forex strategies. You need to have a wider grasp about currency trading and fundamental trading strategies which are more complex than simple trading strategies are suited for investment based trading systems.Day Trading Based StrategiesDay trading strategies focus on making profits from the intra-day currency fluctuations without taking into account the long term market trends. These rely heavily on technical analysis and forex software systems. Choosing a forex strategy is matter of personal discretion. You can use existing strategies or create your own strategies. The aim should be to build a good profit generating trading system. No matter what strategy one may choose the three basic principles that must be upheld by your strategy are:Buy Low Sell HighThe patience to follow this fundamental rule will never fail to do you good. This can be done on any charting frame even daily and weekly spreads. Try and recognise the pattern of fluctuation in a currency pair. Place orders when the rates are in lower range and take profit orders when the rates are at the highest. Then patiently wait. Patience is the key in trading.Money ManagementManaging your money well means taking care of all possibilities. Risk only as much as you can afford to lose. Extreme leverage is a bad idea. Start with minimum amounts and always use demo-accounts for testing and learning whether it is a new trading system or forex software.Emotional ComposureIndecisiveness, fear, greed, impatience and lack of emotional stability are common trading psychological pitfalls and can ruin even the best of strategies. Practice on a demo-account and risk management can help you keep these factors in control. Make sure you are comfortable with your strategy and are prepared for every possibility.The forex strategies you ultimately choose to work with should be technically sound and yet it should be the one you personally find convincing and most intuitive to use.
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