Forex Strategy Secrets
Arguably the main and unchanging secret of Forex trading is that the amount of profit depends on the duration of the transaction.
The less time you spend on a trade, the higher the likelihood that you will not be able to make a lot of money off of it. In order for profits to grow substantially, it takes some time.
The same rules apply here as in real life. It is impossible to carry out a large number of trades in one day.
If you initially base your strategies on fast deals during minor fluctuations of the exchange rate, you consciously limit the possibilities for increasing your capital.
After all, the level of loss can always be set when a transaction is made.
With the help of functions like Stop Loss and Take Profit, the position will close automatically and you will not lose more than you plan.
Another important Forex secret is the need to combine rationality and excitement in your work. In your pursuit of profits, knowledge of economic and probability theory will serve you very well in the long run. It should come as no surprise that Forex traders are sometimes referred to as players. Familiarity with economic theory and laws of market functioning undoubtedly serves as a significant advantage to a trader. However, in order to make consistent profits, you also need the excitement and willingness to take risks.
It would make sense to call this a little form of gambling, since, without the drive to constantly earn more and push yourself, you won’t be seeing that much success. Neither will you allow yourself to truly progress as a trader and evolve your strategies and understanding of the market. The higher the possible profit, the higher the risk, which means that in this case, all the good cards are in the hands of those who are not afraid to take risks.
No less important is the fact which pair you choose for your operations. The traditional EUR/USD won’t necessarily bring more profit than trading AUD/JPY for instance, which is why a portfolio of currency pairs to trade is always the better option to have. Different pairs are more or less volatile at different parts of the day, week, month, and even the year. Knowing the peculiarities behind each of them will let you gain an edge over anyone else who doesn’t know this type of information. Information is the key to profitable trading. The more of it you have access to and are able to analyze, the better off you will be.
It’s worth stating that currency trading cannot be adjusted to any specific framework. Everyone can have their own secrets and trading strategies that they developed during the trading process. The foreign exchange market is an ever-evolving creature that is in a constant state of fluctuation and evolution. There will never be a single ideal 100% working approach that is better than the rest, only a multitude of approaches that work, each in their own specific ways.
Whatever the end strategy is for you, there are certain tips and procedures you want to adhere to at all times if you wish to increase the odds of you staying net positive, and they are:
- Building positive feedback loops, which are created when you successfully execute a trade in accordance with your plans. Building confidence and breeding success from previous successes is very important;
- Performing weekly analysis’ studying charts and patterns, reinforcing existing strategies and theories;
- Keep defining your goals and style. Always have a clear goal of where you are going and what you plan to achieve. Fit your strategies to your trading style and personality, maximizing efficiency and minimizing stress.
The one goal you should be chasing after is developing a system that allows you to remain net positive at all times.
You can’t have every trade being a profitable one, but you can get 3/4. Understanding that the struggle to develop the ideal trading strategy is a dead end will allow you to focus on what actually matters.
A strategy that first and foremost, works for you and allows you to gain a deeper understanding behind the market’s fundamentals with each use, and strategy that fits your character, your style of thinking and doing things.
Do what is best for you, its as simple as that.