Forex Trading - Building a Winning Strategy
Becoming a great forex trader involves a lot of things. A trader must be skilled enough to see which trades should he/she be engaged with and how to proceed with the same trade. Also, a trader must make the right moves at the right time. While a little luck is sometimes involved in forex trading, having a sound strategy is the way to achieving sustained success. There are 3 steps in building a winning strategy in forex, and they would be explained one by one right here.
1. Planning ahead You must plan ahead in order to create a winning strategy. Before you even proceed with trading day, you must already have a plan of attack. With the right strategy and following it unless proven to be the wrong call), your odds of succeeding becomes significantly increased. First, you must decide which currency pair/s you want to go with. Second, you should decide how long should you hold on in a specific position. Third, decide when to release your position in both winning and losing scenarios.
2. Monitor the forex market One of the best ways to become a better trader is to stay updated. You can do this by regularly monitoring the forex market. Being updated is important as trends in the stock market can change in a hurry. It helps you predict potential movements, helping you craft a more effective plan of attack. There are 2 great sources of news for forex markets: charts and news. Charts will help you see which positions are best to invest on. News will help you see any event or trend that can influence the trading market.
3. Keep a forex diary The diary is one technique recommended by experts that is often ignored by most traders. The fact is that writing a “forex diary” will help you in a myriad of ways. For one, it helps you note some of the mistakes you made, lessening the chances of you committing them again in the future. Also, it helps you see which strategies worked well for you and which didn’t. When done properly, it can help you better recognize trading patterns, helping you refine your trading technique and create better strategies. It is recommended that you make your diary as detailed as possible.
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