There are so many forex strategies that traders can choose.
And it’s easy to get confused or misled as to what really works. But it’s possible to choose wisely.
Forex Strategies Which Do Work
Forex strategies which really do work, are based on simple logic, and transparent facts. On the other hand, forex strategies that don’t work well enough…
These tend to rely more on urban legends and superstition. In general, it is possible to predict market price, up to a certain percentage of success.
And it is possible to develop the best forex trading strategy by studying fundamentals, technicals and geopolitics. It sure involves a lot of detective work, and only a handful of clues lead to actual trading action.
Most of the time, the wise forex trader does all this work, but no solid market direction is detected. And yet, this is the best way to trade the forex market. Mechanical trading systems provide many more signals.
But trading itself becomes boring and lacks character. Traders who quit boring day jobs in pursuit of a trading career, look for excitement.
And this excitement comes from the challenge that detective work offers. The challenge is in that every day in the markets is seen as unique.
The belief is that history doesn’t quite repeat itself.
Forex Strategies for More Profit
Forex strategies can offer more profit, when trading itself is no longer a routine job. But rather an active job, where every day is unique.
Through practice and skill development you will able to see fundamentals, technicals and geopolitics. And you will be able to see which factor is more relevant at that time.
Fundamentals are more tricky because a fundamental factor can actually have a double conflicting impact on a currency.
Such as a short term positive impact, and a longer term negative impact. So understanding the timing makes all the difference.
And even though you are not a longer term investor. You need to look at currencies as if you were an investor, and look at politics, stability and interest rates. These factors will determine whether the next buy signal on the daily chart will be for real, or a false one.
Traders lose money in forex trading because they focus too much on their time frame of interest, ignoring investor mindset and central bank policy.
You can first learn forex basics, and then extend to these 3 fields of analysis.
Dealing with Short Term Risk
Remember that all trades start out as losing trades!
There is no need to hesitate to take action, such as adding to a losing trade. Or even giving a seemingly losing trade a second chance.
But because the stress of seeing a losing trade growing larger and larger is too much to handle.
You can actually hedge that open losing trade, temporarily, until it stops growing. By locking the open loss, you will be free to think objectively, without stress clouding your judgment.
You should focus more on dealing with these losing trades.
And also focus on improving winning trades that took too long to become profitable. Winning trades that became profitable after far too much time, hint that could easily have been losing ones. And that entry criteria need to change.
Such forex trading strategies can dramatically improve profitability, all through limiting short term risk.