I have already been hearing some people saying that Forex trading is risky must be person can lose a lot of money in trading Forex. On one hand, this might be good news because it's somehow deterred some people from trading Forex specially when they are not prepared to obtain proper education to learn how to trade well. On one other hand, some people decided to offer Forex trading a take to, as they have been told it is just a quick to be rich scheme. Unfortunately, they lost their momentum because they may not find any profitable trading strategies and thus, they figured Forex trading didn't work.
With due respect, I submit that trading Forex could be a successful venture but we should treat it as a serious business and not really a quick to be rich scheme. What this signifies is that we must understand different segments of a Forex trading business. These are trading strategies, money management and trading psychology. In this informative article, I'll focus on the very first segment - trading strategy. option stock trading
I still find it fair to say that Forex traders will first learn trading strategies in this business before they consider one other two segments. However, as some people take the view that Forex trading is just a quick to be rich scheme, they cannot have the patience to accomplish the required work. Instead, their primary goal is to find the most profitable strategy so that they'll make profit the shortest time possible. My question is whether there's anything called the most profitable trading strategy. I am aware by asking this question, I'm inviting a debate here because there are tens and thousands of Forex strategies obtainable in the market. Every one of you'll come up with your own personal opinion. If I might, let me first group all Forex trading strategies into four major categories: (i) trend strategies; (ii) trading range strategies; (iii) breakout strategies; and (iv) news trading strategies.
I understand what I'm going to say below will disappoint some of you - there's no such thing called the most profitable trading strategy. As traders, our job would be to start to see the chart of a currency pair and decide when it is in a trend. If that's the case, we've to use trend strategies because it does not seem sensible to make use of trading range strategies. Conversely, if the currency pair has formed a trading range, it does not seem sensible to use any trend strategies. Therefore, we've to make use of trading range strategies. In short, a trader must learn at least one trend strategy and one trading range strategy.
A number of my trading buddies would rather trade the Forex market predicated on news. What they do is to find the news headlines to trade and consider what sort of particular currency pair will react following the announcement. Typically, news trading strategies is a quick scalp on a currency pair and derive from a chart on a lesser time frame. what are stock options
Finally, the key reason why breakout strategies exist is because there are traders who would rather take a position on a currency pair after it breaks out of a trading range.
As you can see, different traders can have different trading preference. First thing I think you have to do is to learn your own personal preference. Are you currently someone who's ultra conservative and you don't prefer to risk much in a trade? Or are you currently someone who's aggressive and it is okay for you yourself to handle higher risk investments?
Even though I mentioned news trading strategies here, I do not trade any one of them personally because they cannot fit my trading personality. I'm pretty much focusing on both trend strategies and trading range strategies.
Here's another important point for you yourself to consider if you should be learning any strategy from another person. I'm sure that anyone from whom you learn can have his own trading rules. You've to make sure that these rules fit your own personal trading personality. Or even, it is probable that strategy will not do the job though it works for that person. If you determine to tweak these trading rules to suit your preference, you have to anticipate to spending some time on back-testing and forward-testing the modified strategy to make sure that it generates very good results consistently.