Creating your Forex Trading Strategy (1)

Ordinarily, most new traders do not have a trading strategy.  However, a Forex Trading Strategy is a set of rules to be met for trade entries, exits, order types, money management, time frames etc. When studied and properly applied, it can provide a statistical expectation for the specified rules, and help traders and investors determine if a trading idea is profitable. Forex Strategies can be based on technical analysis charting tools, fundamental and news-based events. Usually, they are available for free, for a fee or developed by the traders themselves.

Prepare to trade Forex Technically

I am not referring to Technical Analysis here. What I am trying to bring to fore are the procedures involved in trading Forex. As we know, trading over the internet presents unique opportunities and is subject to special risks. Trading financial instruments must be taken critically as it is serious business.  Understanding your risks and developing measures to moderate them is very important with emphasis on preserving your capital.

For instance, if you are trading a Demo Account, you still need to be careful because you are training yourself for trading real money. I remember very vividly in my early days of trading when I thought I knew it all. I was making a lot of money in my Demo Account and I did not train myself properly. By the time I put in real money, it was a different game all together. I know a lot of you reading this can relate to it. The lesson to be learned here is “Do not train yourself incorrectly”.

I will enumerate some of the risks involved here.

Prepare to Trade Forex Mentally

The Psychological Perspective

Your first resolve should be to determine precisely what you want to achieve. Get your pen and a notebook and write it down. Be as detailed as you can as this will go a long way to help you eventually in your performance. You should ask yourself the following pertinent questions:

·          Do I want to live off my trading?

·         Is this just another means of income?

·         Am I trading Forex because I think it is an easy way of making money?

·         To make me financially independent?

·         Is it flexibility?

·         Financial freedom? And a host of other reasons

Whatever your reasons are, they must be clearly stated.

Preparing for the New Year

"Money is not the most important thing in

the world. Love is. Fortunately, I love money." -

Jackie Mason

Welcome to the year 2014. I believe that we all had a remarkable holiday. As the markets have started gaining momentum and experiencing increase in liquidity, I am quite sure a lot of you have started taking advantage of the unique opportunities that Forex trading offers.