Choosing a Trading strategy

Forex Trading Nigeria

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Posted by on Saturday October 6, 2012 15:10:43:

When it comes to trading forex, one of the things that can keep you successful in the long term is your trading strategy. You need to choose a strategy that works best for you.

What is a trading strategy?
This is simply a long term plan that you intend to apply to your trading activities. It is something you have planned in advance prior to trading and sticking to it. It is something you have thought properly about before implementing it with the hope that it would make forex profitable for you.

Questions to ask
When it comes to choosing a strategy, you need to consider the kind of trader you are as your personality and style counts.

- Are you a full or part time trader?
- Do you have many year of experience or a newbie?
- Are you trading with little or hug capital
- How much risk are you willing to take?
- Would you prefer scalping or trend trading

Some trading strategies
- Buy Low Sell high
- Scalping
- Trend trading
- Short selling
- 1:2 Risk to Reward ratio
- News Trading
- Price action

Truth is there are many forex strategies and some are still being developed while some are already so popular. You just need to identify one that works for you and stick to it.

Anyone can develop a trading strategy or customize an already existing one and once he gets used to it, he would be making good money.

Simplest way to trade
There are many complex trading systems and I've had experience with some of them which involved using forex indicators such as RSI, MACD, Bollinger bands and so on but it seems the easiest method is simply Price action. Yes, just following the price and charts and making logical predictions can help you stay long in the game. You don't have to know a whole bunch of forex indicators to trade successfully, you just need to know how the price reacts to market forces. When you know which side the market is on, you would be able to choose the right side for yourself. At times, you would know when a market is reversing after being overbought or oversold. With price action, you would know which point is a good price to enter and exit.