I have already been hearing some people saying that Forex trading is risky just because a person can lose a bundle in trading Forex. On one hand, this can be good news because it has somehow deterred some individuals from trading Forex specially when they're not prepared to have proper education to discover ways to trade well. On one other hand, some people are determined to offer Forex trading a decide to try, as they have been told it is a quick to be rich scheme. Unfortunately, they lost their momentum because they could not find any profitable trading strategies and thus, they concluded that Forex trading did not work. [http://finance.dailyherald.com/dailyherald/news/read/31838537/Options_Trading_Strategies_Newsletter_And_Forum_Website_Launched
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With due respect, I submit that trading Forex could be a successful venture but we must treat it as a critical business and not really a quick to be rich scheme. What this means is that individuals must understand the different segments of a Forex trading business. These are trading strategies, money management and trading psychology. In this short article, I'll focus on the initial segment - trading strategy.
I still find it fair to express 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 a quick to be rich scheme, they don't have the patience to complete the mandatory work. Instead, their primary goal is to consider the absolute most profitable strategy so that they'll make money in the shortest time possible. My question is whether there's anything called the absolute most profitable trading strategy. I know by asking this question, I am inviting a debate here because there are a large number of Forex strategies available in the market. All of you will develop your own opinion. If I may, i'd like to 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 am going to express below will disappoint a number of you - there's no such thing called the absolute most profitable trading strategy. As traders, our job is always to begin to see the chart of a currency pair and decide if it is in a trend. If so, we have to use trend strategies because it does not sound right to utilize trading range strategies. Conversely, if the currency pair has formed a trading range, it does not sound right to use any trend strategies. Therefore, we have to utilize trading range strategies. Simply speaking, a trader will need to learn a minumum of one trend strategy and one trading range strategy. [http://finance.dailyherald.com/dailyherald/news/read/31838537/Options_Trading_Strategies_Newsletter_And_Forum_Website_Launched
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A number of my trading buddies would rather trade the Forex market based on news. What they do is to consider the headlines to trade and consider how a particular currency pair will react following the announcement. Typically, news trading strategies is a quick scalp on a currency pair and are based on an information on a lower time frame.
Finally, the key reason why breakout strategies exist is since there are traders who would rather have a position on a currency pair after it breaks out of a trading range.
As you can see, different traders could have different trading preference. First thing I think you must do is to learn your own preference. Are you someone who is ultra conservative and you don't want to risk much in a trade? Or have you been someone who is aggressive and it is okay for you yourself to handle higher risk investments?
Even though I mentioned news trading strategies here, I don't trade any one of them personally because they don't fit my trading personality. I am more or less concentrating 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 am certain that the person from whom you learn could have his own trading rules. You have to make sure that these rules fit your own trading personality. If not, it is probable that strategy will not do the job even though it works for that person. If you determine to tweak these trading rules to accommodate your preference, you must be prepared to spending some time on back-testing and forward-testing the modified strategy to make sure that it generates very good results consistently.