Forex Strategy

stop lossWhen you trade forex, it is important to understand how to place orders with a forex broker. Trading orders are chosen according to your trading style and intentions – the way you plan to enter and exit forex market.

target profitForex trading involves analyzing and predicting. Whenever you enter a trade you should have a slight idea of where the price is going before reversing. According to this guess, you are able to set a profit target for each trade. Forex traders set daily and weekly targets based on the experience. Why is it important to know the target? Does setting a target limit the maximum profit possibilities? Is knowing your target necessary for the success? 

time tradingAll experienced forex traders will tell you not to overtrade. The question is, what is too much trading? Is it true that the less time spend in forex market, the better? Should you get out of trading the moment you have made your targets, or is it better to stick around to catch more opportunities? 

strategyInternet is packed with numerous paid strategy offers which promise to “reveal forex secrets” for hundred bucks. Designing a strategy to fit your individual trading style is complicated and time-consuming process. The truth is that there are no secrets about forex trading. What really matters are experience, dedication and, when it comes to forex strategies, an old fashioned trial and error testing. The question is, how is testing a strategy done? Are there any special tricks you need to know?

mistakesForex trading requires a lot of discipline and cautiousness, especially when it comes to making entries. The lurking mistakes of entry points can turn potential profits into high-risk losses. Among the right strategies of entering a trade, what are the common entry mistakes that can turn your trading experience into nightmare?

curve fitting back testingThe most important goal for each forex trader is to build profitable strategy which on average brings more winnings than losses. Designing your trading strategy includes testing the results and the ability to endure the daily surprises that come along during trading hours. The method used to verify your strategies is called backtesting. In many cases, though, the most common story you hear about trading system is that even after backtesting successfully, the trading account goes bankrupt within days. Why is this happening? What are the causes of backtesting failure? What is the right way to backtest? 

trading rulesForex trading, like any other successful business, requires well-developed set of rules. It is not easy to build the winning trading strategy, however it is even harder to follow your own rules. The reason behind forex rules is obvious – your monthly income is closely related to the outcome of the trades. In most cases at the end of the month it is not your rules that cased the negative Profit/Loss; it is you not following the rules.  Why is it so tricky to obey the system? And is there a way to overcome this misbehavior? 

adaptationWhile figuring out your forex trading strategy, you most definitely will stumble on win/loss ratio and that’s where the probability comes in. At some point you realize that with a fine system and excellent money management, accepting losses is a big part of winning. The question is what kind of trading performance is profitable in the long run – giving the forex market some space to move or jumping on small profits? 

trading planForex trading requires a lot of thinking and planning and whether you like it or not, the success in forex depends on psychological strength of the trader. In fact it is widely believed that most traders that fail, trade without a plan. Having a plan isn’t quite enough; you have to religiously follow it. However, in most cases, every one of us tends to break the rules. It made me wonder, are there any specific physiological reasons why forex traders sometimes skip their own strategic plans and how does this misbehavior affect the profits?

losing in forexThere are times when it seems the day has started on a wrong foot or, more precise, at the wrong pip! Some days you are in the 90% of traders that fail, realizing how easy it is to lose quite a number of pips when you should have done a complete opposite. After burying the lost pips in sorrow and tears, you find yourself back in the 10% of forex traders that struggle to profit. However, the fear takes over and you are too afraid to take the plunge at the next trade… and somehow it is always the trade that could have made your dreams come true!