Best Forex Trading Strategy
Are you looking for the best forex trading strategy? I’m sure every forex trader is looking for this so here is my point of view: there is no FX trading strategy that can give the best results for all traders.
Each trader must develop a personal strategy according to the traders’ skills and personality. The Foreign Exchange Market is the largest financial market in the world so you can make profits investing on Forex market but you must know yourself and build your own strategy.
If there would be just one perfect strategy everyone would use it and everyone would make profits but, as we know, only 10% of all the forex traders are making profits trading foreign exchange and this is why each trader must build its own strategy.
Forex Trading Strategies For Beginners
Here are some suggestions about to build your FX trading strategies especially if you’re a beginner.
First of all you must get informed and know the FX Market and how forex trading works. The most important traders on this market are the central banks, commercial banks, investment funds or individuals with a very large capital.
Because the liquidity is high there are many individuals with less capital that are trading foreign exchange.
On Forex market you will trade currency pairs, for example you will buy US Dollars with Euros, so there will not be an actual product traded, all trading will be virtual and very speculative.
You should learn the terms used in trading forex and what it represents. For example Pips are measuring the increase of a currency pair and its value is usually of $10 or $1.
Forex trading is based on the prediction of the movement of price for a specific currency pair.
For example, if you think that the value of US Dollar will increase against the Euro then you will Sell EUR/USD, meaning that you will sell Euro to get US Dollars.
To make these Forex Forecasts you must use the Technical or Fundamental Analysis.
The Technical Forex Analysis is most used by small and medium forex traders because it permits to analyse the price on a daily basis.
The Fundamental Forex Analysis is most used by banks, investment funds or individuals with a large capital asnd it involves analyzing different factors such as the political situation of a country, the taxes, unemployment or inflation of that country that might affect the value of its currency.
You must know yourself and know if you can control your feelings because this could affect your decisions. So, you must develop a trading strategy according to your personality, your knowledge and experience.
Knowing yourself can be achieved by practicing forex trading using a Demo Forex Trading Account without real money.
The most important two factors determining a winning forex trading strategy are money management and discipline.
Choosing the right forex broker can be the key to your success as a Forex Trader so pay much attention to what broker to choose. Always chose a broker regulated by a financial authority.
If you want to use an automated forex trading system you should keep in mind that these systems are using only mathematical formulas based on a technical analysis of the price so if an event such as war or natural cataclysm appears the system will not take it into consideration and this could affect your trades.
In the end I can say that building your own trading strategy according to your experience might be your best forex trading strategy.
Author: Guest Posting Services