You might have tried everything to succeed in the foreign exchange trading market. Possibly, you might have subscribed to several tutorials by world-famous forex gurus and experts. However, you might also observe that the forex strategies they teach are not working for you.
Succeeding in the foreign exchange trading market does not revolve around acquiring knowledge from other people. It is more of acquiring new wisdom through personal experience. It is difficult to understand any theory if you have not seen it in motion. The best kept secret by strategists in the field of forex is that they do believe that they should match what other traders know. Instead, they believe that they can build forex strategies based on what you personally know. Since every trading day is a new learning day, you can always integrate new knowledge into your techniques.
The following are the five fundamental forex strategies that all traders should know – newbies and experts alike:
- As much as possible, trade in accordance to the direction of the trend. Many experienced traders would give you hints like: “Treat the trend as your friend” and “Trade in the trend’s general direction.” With such noteworthy advice, you can say that charts and market factors that affect the trend are of utmost importance. Reading the trend is one thing, but predicting the trend is another. If you know how to do both, then you have the upper hand.
- Most forex strategies will teach you longevity. Knowing the skills to stretch your otherwise limited stay in the foreign exchange trading market is actually the key. In order for you to get the feel of the trade, you should always begin with a small trade. This way, you will be able to read the trend. If ever you make the wrong decision, you should not regret. Charge it to experience. At least you can afford to say that if you have not traded a significant amount of your fortune.
- Just to be safe, you should remember that trading with a stop loss is one of those forex strategies that can save your life. This particular technique falls under the money management category. In as much as you need to learn how to enter the trade, you should also take note of the proper exit strategies. Though you should take to heart that forex trading involves some losses, you should also take note that you have to stop somewhere and you should stop while you can still afford to make a comeback.
- As a trader, you should set your trading indicators. These trading indicators are quantitative parameters that serve as your basis for making those important trading decisions. By all means, trust them. If you are going to choose between your gut feel and your indicators, always go for your well-established indicators. Of course, it may fail from time to time but you should never neglect these indicators.
- Lastly and most importantly, you should follow your rules. With experience, you will be able to come up with the winning formula. This formula is one of your most effective forex strategies that you will have to trust at all times. Upon learning its dynamics, use it again and again, optimize, and create profit every single time.
With these five fundamental strategies in forex, you will never go wrong for sure.