Forex Strategy Team  
Home Page Services Benefits Subscribe Signals Performance Disclaimer Contact us

Forex Info
Forex Charts
Forex Forecasts
Forex News Room
Forex Tools
Currency Converter
Earnings Calendar
Free for your web site
Movers and Shakers
PDA charts
Titanium Service
Long Term Signals
Long Term Performance
Extra Info
Links 1
Links 2
Registration

 

   

How to be Successful in Forex

 

As you establish your trading strategy, what things should you consider to make it successful? What are the major differences between a good, successful strategy, and an abysmal failure? Really, the list is almost endless, but there are a handful of crucial factors no trader should be without.

First, you have to eliminate the small things that can lessen your profits. On the most basic level, find a brokerage with very tight spreads. You should also be aware of any hidden fees or other commissions your broker might charge. You should also make sure that your broker doesn't expose you to slippage - when an order is executed at a slightly different price than you asked for. Finally, you should pay attention to the additional costs of trading on margin. Once again, some brokers hide their fees or structure them in non-transparent ways. You should know ahead of time what trading on margin will cost you, and find a broker who can minimize this cost for you.

The reason that it is so important to eliminate these small losses is that you can be sure that they will always be there. Almost everything in forex trading involves probabilities, but this is one cost that you know will affect you all the time. So even though these costs may be relatively small, they will certainly add up over the long haul.

After choosing a broker, the most important thing is to establish a consistent strategy and stick with it. This is where education can make a big difference. Some of the best methods for finding and analyzing a strategy are mathematical and quite complex. But at the core, the most important thing is discipline. Forex traders lose the most money because they respond to the market emotionally. A clear plan helps you objectively determine what you should be doing, regardless of how you feel.

This is where you can use the past to your advantage. Once you have established a strategy, try applying it to historical data. In other words, work through what happened a few years ago and ask how your strategy would have guided you to respond. If you don't think you can be honest about it, go to a period when you weren't trading and don't already know what happened. Now apply your strategy to these forex charts and see if it would have been successful. This process is called back-testing, and it lets you see whether your plan will really work.

Once you have established a pattern of trading, you can benefit from powerful assessment tools. For example, z-score helps you look for patterns in your trades. You might discover, for instance, that most of your earnings and losses come in streaks rather than randomly. This would encourage you to strengthen your position when you see the beginning of a winning streak, or hold back when it looks like the beginning of a losing streak.

In summary, the process of establishing a successful strategy is a matter of working through everything and eliminating problems one by one. This process also becomes more specific and more technical the further you progress. Finding a broker is fairly basic; outlining an objective strategy and following it is more involved; analyzing your plan with statistical models requires significant experience and skill. The one thing that stays the same through the entire process is the need for good education and help from experienced investors. If successful forex trading could be described in one phrase, it would be this - be willing to learn from other people and be critical of yourself.

 

 

 

 

 

 

Subscribe to ForexStrategy Team Services - Home

MAKE THE RIGHT CHOICE! TRADE WITH US!

Copyright � 1998 - 2010 ForexStrategy Inc. & Forex News Agency, Inc.
All rights reserved.