Since psychology is a major part of forex trading it is probably always best to develop your own trading strategy based on your personality and skills, but how do you go about it?
Start With The Basics Of Forex.
Start with support and resistance, this is the absolute key to forex trading and it should be the main focus of any trading strategy. Where price has been rejected before there is a higher probability that it will be rejected again, this is a plain fact, it won’t always be the same of course, sometimes it will cross the support or resistance areas but these are the points where there is a higher probability that it will reverse as before. It is tempting to add to your strategy too soon, but it is so important to focus well on one specific thing before you move on to another. Give yourself the chance to identify exactly how you will approach your trading when the price approaches these levels, learning forex step by step will help you learn all the different aspects of forex trading to a good standard that will provide you with the foundation that will guide you on to the long term path of success.
Basic Forex Money Management.
In due course you will want to employ a decent money management strategy where you take part profits from trades as they move into profit, but at the start it might be a good idea to fix you profit and loss, taking either a loss or a win of a certain amount of PIPS for every trade. The important thing for a forex trader is to follow his strategy, and the purpose of the exercise is to learn to follow your system rather than to make a profit, it may be that a better money management strategy will ultimately make more profit, and this is always easy to see in hindsight, but only if you follow it. You need to learn how to follow your strategy rather than learn how to create the best strategy, is you can’t follow a simple system that says take 30 PIPS profit or lose 20 PIPS each time then you will be hard pushed to implement a better system. They key to profitable forex trading is within you not the system, it is the operator that’s the crucial part, it is no good having the biggest and fastest car if you can’t drive it, better to stick with a basic model which you know will get you there eventually without killing you.