Forex trading strategies can help you grow your small account into a large one. Therefore, you need to pick the best strategy for you. And only trade the best setups. That will decrease your risk. When you’re trading the ebst setups, you won’t over trade. Over trading is the death of many account large or small. But especially small accounts. So avoid over trading at all costs.
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Building Forex Trading Strategies
Finally, you’ve come so far in this Forex trading course that now you can plan and build different Forex trading strategies for yourself. To wrap up the previous courses and the tutorials, you’ve so far learned the basics of Forex, you know what Forex is, how it works. And you know the factors that move the Forex market.
You’ve gone through different chart types in Forex trading and also understand the price patterns like Japanese Candlestick Patterns. You’ve learned the concept of support and resistance and understand several drawing tools; including drawing trend lines and using Fibonacci Retracement levels.
Lastly, you’ve also learned the technical analysis and can use several technical indicators and oscillators like Moving Averages, RSI, Stochastic, MACD, and so forth. Now it’s time to put everything together and build a trading strategy for yourself in this phase.
Developing a trading strategy is the most important part of Forex trading and it really defines your future in this field. If you have a better trading strategy you’ll have better chances of making a living from trading.
However, always remember that no strategy is perfect. And even a successful strategy requires changes all the time to stay relevant to the market conditions. That’s why you’ll have to continuously assess and improve your strategy as well.
Factors to Consider for Developing the Strategy
There are many factors in developing Forex trading strategies. Largely, it depends on how you see the market, how much you’re planning to invest, what your needs are, and what you expect from this business.
Your investment size will depend on your financial strength. But it’s always advised to test the waters with a small investment and then gradually increase it. Once you determine these things then you need to pay attention to other factors like the trading styles and approaches you want to adopt.
Forex trading is flexible and versatile. You can be a day trader, a medium-term trader, or a long-term trader. Day traders usually track and analyze the market for an entire day and prefer to close their positions before the end of the day. Medium-term or swing traders plan their trades in a way that their positions can remain open for several weeks.
In contrast, long-term traders follow a bigger trend and their positions can remain open for months until their targets are achieved. If you have a day job day trading probably won’t suit you. However, if you wanted to be a full-time trader day trading is very much for you. It’s also possible to spread your positions across different time frames. Make sure you don’t get carried away with over-trading.
For example, you can plan to have one or several medium to long-term trades. And during the same period, you can seek short-term opportunities and perform day trading as well.
Risk management is one of the most important parts of a trading strategy. You can choose between aggressive, conservative, and moderate approaches. In an aggressive approach, traders enter the market with large quantities.
The aggressive trading style carries huge risks and is only suitable for experienced traders. The moderate trading approach carries less risk compared to an aggressive trading approach. The new trader should only start with a conservative approach as it provides the necessary space to identify and fix the flaws in your trading strategy.
So basically your trading approach will determine the risk factor. For instance, you’ll risk more if you adopt an aggressive approach. And you’ll risk less if you adopt a conservative approach.
However, always remember when you’re new to Forex trading you should adopt a conservative approach and slowly build the momentum. Hopefully, our Advanced Forex Trading Course will help you build the right Forex trading strategies and you’ll be successful in your trading journey.
Adopting Forex Trading Strategies
Trading style is an important part of Forex trading strategies as it determines how you read the price action and make your decisions. There are various trading styles. For example, you can be a swing trader. A swing trader generally prefers to enter and exit the market when there is high volatility.
You can also learn to trade the breakouts. A breakout trader carefully examines certain price levels and places the trades only when those levels are breached. Likewise, you can also trade the reversals. Japanese Candlesticks Patterns and Western Charting Patterns are an excellent way to spot and trade the reversal.
Scalping is another popular trading style that’s very popular among Forex traders. In this trading style, traders analyze the market and place the traders for very short periods; typically between 5 and 30 mins. In this Advanced Forex Trading course, we’ll be covering various trading strategies including day Trading, scalping, breakouts, and so forth.