FOREX Strategy

In any business venture in life you need a strategy or plan and FOREX trading is no different. If you fail to plan you will fail so you need a specific FOREX strategy to help you succeed.

What is a FOREX Trading strategy?

Quite simply it is your blueprint for how to make money and increase your wealth by trading online FOREX.

Most traders simply try and follow get their FOREX trading advice or education, by following others but this is not a way to make money.

Lets look at the basics of a FOREX trading strategy and how to implement it.

You will already have a method you are happy with ( see our section FOREX education for more advice on how to do this ) and you will be confident in applying it for longer term gains.

Now you need to put your FOREX strategy into action and the following points need to be considered.

1. Your profit objective

When you start trading you need to have a realistic profit objective.

If you consider that the top traders make 50 - 100% per annum trading currencies, then this is a good and achievable figure to aim for.

You cant hurry FOREX Trading profits, so don't try.

Base your profit objective on an annual basis and trade for the long term.

Periods of losses or drawdowns can last for many months so be prepared for this.

2. Implementing a money management strategy

This is much more than simply learning how to place stops and is the one area that most novice FOREX traders get wrong.

In many cases they have good solid FOREX trading systems, but don't have the correct money management techniques to allow them to follow and profit from trends.

Here are some money management techniques to work into your FOREX Trading strategy.

• Enter Stops as soon as you place your orders. Do Not Use mental stops; as if you miss it you maybe tempted to run it.
• Do not trail your stops to quickly, give the market room to breathe.
• Sharp retracements even in strong trends are normal and if you are following a trend you do not want to be bumped out to soon. You need to get used to seeing sharp losses in open equity, if you are trend following this is normal and you need to keep your eye on the long term.
• If you want to make money and only have a small account trade selectively and risk up to 10% of your equity.

Do not try and restrict risk to much if you do you will not make big profits.

3. Breaks from trading

Sometimes it's good to just have a break form trading liquidate all positions and forget about trading.

Try and have at least a month off each year and don't even think about online FOREX trading.

4. Further education

Lots of traders think they constantly need to be learning new things about trading or reading books. If you enjoy, it go ahead, but there really is no need.

Once you have a method you are confident in then all you need to do is just execute your orders.

If your FOREX Trading system works there is no need to change it.

5. There is more to life than trading!

If you find online FOREX trading stressful, or don't enjoy it then really you should consider whether trading is for you.

Most people who trade and execute a FOREX Trading strategy, are confident relaxed, like taking risks and don't get stressed - If you are this type of person, you could soon be making some big profits in online FOREX trading.