While learning to trade Forex, there’s a good chance you will experience some confusion about which trading strategy to use due to the massive amount of Forex systems and strategies on the web these days. So, what are some of the core components of a worthwhile and effective Forex trading strategy or trading system?
Simple is better – The strategy or system that you ultimately decide to use to trade the markets should be one that is not overly complicated. The world of Forex contains a lot of trading systems and strategies that are big on claims but small on teaching you to actually trade effectively. Instead, according to harmonic trading, you are probably going to get some very confusing looking indicator or software-based system that look more like a piece of abstract art on your charts than an effective trading strategy. You want to stick to simple price action based trading strategies that don’t make you use tons of indicators.
Effective trading strategy – Clearly, you need to use an effective Forex trading strategy. But, how can you know for sure if a certain trading method is effective while you learn to trade forex? You can never be ‘sure’ that a certain trading strategy will be effective because any strategy can lose money if used by an out-of-control trader. Generally speaking, trading methods that are built around the core price action data of a market are the easiest to use and most effective.
Fits around your schedule – You will not be able to day-trade if you’re at work all day when the markets are active. Thus, it’s important to find a trading strategy that works around your daily schedule. When first learning how to trade, it’s best to focus your efforts on the daily charts since they provide the most practical view of the price movement in a market.
Adaptable – You will need to find a new trading strategy if your current one is not flexible enough to allow you to trade in any market condition. Markets are not always in strong trends. So, you need to trade with fx trading strategies that allow you to trade both trending and consolidating markets.
Finally, as you learn to trade Forex you need to realize there are no “magic-bullets”. Discipline and consistency are the primary ingredients to making money in Forex. Anyone can get lucky and make some money for a month or two, but if you want to profit every month, year after year, you will have to shift your mindset from thinking about the now to thinking about the bigger picture. If you want to obtain long-term consistent you’ll have to get a top-notch trading education and then apply what you learn in the markets with religious discipline.
You can give yourself a good chance at making money consistently in Forex if you use an effective trading strategy and apply it with rigid discipline. Do not become trapped in the snares of Forex sites trying to get you to buy a piece of trading software that promises to make you rich. Instead, look for real fx training which actually teaches you how to trade and read the natural price dynamics of a market.