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Forex Trading Strategy – The Number 1 Mistake Most Forex Traders Make

Know what the number one problem most people make when it comes to Forex trading? They jump in head first without doing any research and without figuring out what they heck they want to do in the markets. In fact, I’m willing to bet that at least 50% of the people reading this article RIGHT NOW have already dove foolishly into currency exchange at least once in their life. Don’t lie to me, I know it’s true.

The key to success with Forex trading is having a strategy. There are many different proven strategies out there, all that matters is you choose one of them and stick with it. Chart out a plan of action and, here’s the kicker, STICK TO IT!

You need to figure out how you’re going to work the markets before you jump in there. Why before? Because once you are in the markets you are going to get really emotional and you will stop thinking clearly. We get emotional due to both success and failure, and both cloud our decision-making. Emotions are great! Just not when it comes to currency trading.

A lot of people don’t put together a plan because they are scared to. They feel worried that they aren’t smart enough to figure out how to act. But if you aren’t smart enough to figure out a strategy when you have time and space to do so, how well do you think you’re going to strategize when in the heat of the moment?

The fact of the matter is you don’t need to be smart to succeed at Forex. You don’t need to be smart to come up with a plan for trading currencies. Just follow the strategy of another Forex trader who was successful before you.

For example, using a strategy that revolves around trends is a great idea. Lots of people have made lots of money by noticing signals that correspond to a possible gain or loss in the market and then acting accordingly. Basically this strategy revolves around attempting to predict future movements by learning from pasty movements. Remember that old saw about history repeating itself? Might as well make some money from that insight.

Technical analysis also offers a practical avenue for Forex trading. Basically with this strategy you’ll just be making note of the crossover, the upsides and downsides of the market, to get a good idea of when to buy and when to sell.

No strategy that you could choose is going to perfect. You are going to lose some money no matter what, but with the right strategy you’ll gain a lot more. What’s most important is that you pick a strategy and you stick with it, no matter what happens in the market!

Best Trading Strategies for Ensuring Profit

Stock Trading is all about arriving at the right estimates and making nearly accurate speculations so that the trader is able to reap profits from his investments. Each trader has his own strategy which is based on the fundamental trading rules that have been theoretically established. Coming up with a suitable strategy requires good experience of managing the market scenarios and understanding the finer nuances of operating in the major trading markets.

FX trading is also a popular trading market and it poses even greater challenges as the rates of the foreign exchange fluctuate as per the dynamics of the global economic market. While coming up with a perfect strategy is next to impossible for traders, it is feasible to come up with really effective strategies that help minimize losses and provide greater chances for profit.

Penny Stock Trading Strategies:

Penny Stock Trading Strategies help to determine the best conditions for trading in penny stocks which are regular stocks that are trader are fairly low prices (approximately $5 or less per share). These stocks are usually not listed on any security exchange market even though there is permission to include them. Due to the nature of costs associated with these securities, small businesses involve themselves in their trade. The trading volume for these stocks are also low. Some may consider this as being quite a profitable opportunity in terms of stock trading, but there are considerable risks involved in the trade of penny stocks. It is therefore advised that their trading be taken with adequate caution as low costs of the shares should not cloud your judgement on selecting the best strategy to minimize losses.

Swing Trading Strategies:

This trading strategy is suitable for traders who are discretionary in their approach. The success of the trading activity in this strategy depends on the extent of discretion exercised by the trader. This strategy is based on the concept that holding tradable assets for a certain duration could reap profits due to the “swing” or change in the prices of the assets. Traders can keep this position for durations that are longer than day trading holding time and shorter than buy and hold investment positions that generally last a couple of years. When using this strategy, traders often utilize mathematical rules for estimating the best conditions for buying and selling. This also helps in eliminating the involvement of emotional biasness, subjectivity, and excessive manual efforts that are otherwise common in the swing trading approach. Risks in this strategy are mainly dependent on the nature and extent of market speculation involved.

FX Trading Strategies:

Forex trading strategies comprise a group of analytical rules and methods that are used for determining the best conditions for selling and / or buying currency pair at a specific time. These strategies are planned with the help of two specific aids, namely, news and current events that have an impact on foreign exchange rates and charting tools designed for technical analysis. Any trader who has dealt in foreign exchange is aware that with such high fluctuations and unstable dynamics of the currency market, there are only two ways of planning these strategies – speculation and hedging. Due to the nature of trading involved in this market, it is usually advised to make use of automated trading systems where traders can “teach” the system to monitor the market as per his own strategic methods and detect favourable trading conditions. The only alternative to this approach is to get a person to manually monitor the minute changes on the screen and make appropriate analyses and calculations based on the changes.

How Do You Choose the Best Day Trading Strategy?

The wealth of information available for you in order to learn how to day trade can be overwhelming. Speaking from experience, when I first started intraday trading I found it hard to see the wood for the trees. What with all the books, blogs, magazines, videos, seminars and all other media out there, it is not surprising that the majority of day traders fail to even break even. Statistics just released indicate that just over 97% of new day traders, who have been blinded by the potential wealth in the markets, fail to break even within a year. This is a huge statistic, and can be directly attributed to information overload. So how exactly does a trader choose the best day trading strategy?

Consider this – for every trade there are two opinions. If you buy stock then someone else has to sell it to you. Conversely, if you sell stock, somebody else has to enter the market in order to buy it from you. So who is correct? Clearly both traders cannot be right – they both have different strategies to help guide them into market entries and exits. Let us take this example further – let us assume you made the wrong decision and you are now at a loss. Exactly what signals did your day trading strategy tell you with which to buy this stock?

Believe it or not, there is a silver lining to the cloud when you make consistent losses. By simply keeping a day trading diary you have the opportunity to go back through the day and examine each of your trades. I attribute my success as a day trader purely down to the fact that I kept such a diary. During the heat of the day, at times it can be hard to take a step back and really analyze if you are making the right trading decisions – by keeping the diary, after the trading day has completed you can go back and check each of your trades. If it was a winning trade, what exactly made you take it? Establish this factor and multiply it in your strategy. More importantly, if you took a losing trade, what made you take it?

This last point is essential. Perhaps you are struggling to break even as a day trader? By evaluating your days trading decisions you then have the opportunity to correct your strategy going forwards. For example, did you take a losing trade by going long stock when the 10 day exponential moving average passed the 3 day? If so, maybe look at adding a buffer in your strategy – so under certain circumstances you go long only when price has passed 1% of the average.

Put simply, this is how to develop the best day trading strategy you can. Specifically, this is because you are developing a style of trading suited specifically for your chosen timeframes and personality. To reiterate this, it is pointless taking other traders strategies as maybe they trade at a slower or quicker pace than you are comfortable with. I appreciate this does sound like much trial and error – and it should! This is the way the best day traders in the world have molded how they trade.

In conclusion, the way in which to develop the best intraday trading strategy is to build your own one. And the way in which you do this is by examining and evaluating your previous winners and losers. Good luck and happy trading.