Forex Strategy | How To Determine If Your Forex Trading Strategy Is The Best Forex Strategy
Forex trading strategy by definition is analysis of trading conditions that a forex day trader uses to decide on either a buy or sell of any currency pair at any given time.
There are many ways to make that decision but most of the simplest forex strategy decisions are best made with an informed mind and wise money management choices in place.
The bottom line is that taking any trading decisions that are not in your forex trading strategy without discipline will ordinarily lead to losses.
As a beginner, play it low and safe, till you obtain the completely necessary exposure and practical experience to develop into a pro.
It is often said that it requires great nerve and skill to develop a great forex strategy. This may be true but it doesn’t consider that all skills are learnable and as such transmissable to people willing to learn.
One thing to consider is that any forex strategy requires consistency. Your trading plan must be tracked and confirmed via your own forex strategy trade journal.
This will give you more benefits and will assist you in understanding trading giving even greater earnings in the short term as you can determine what worked, what didn’t work and what you could do better.
How To Create A Forex Strategy Trade Journal
The simplest way is to get a book and simply write in it.
Draw up the following columns:
Strategy Idea, Date, What I Did Right, What I Did Wrong, What I Could Do Better.
Abbreviated this would be Forex Strategy | Date| Amount | Right | Wrong | Better?
Here is a free download you can use as a template for your forex strategy journal.
It is in 3 formats… pdf for printing and and spreadsheet formats for those that prefer spreadsheets. Right Click Save-As to take home with you (Ctrl +Click Save As on Mac)
Forex Strategy Journal .pdf
Forex Strategy Journal .xls
Forex Strategy Journal .ods
How To Use The Forex Strategy Journal
The wisest way to ensure that you are in fact employing the best forex strategy is to measure it with due diligence. Many people start trading forex by demo trading.
Many forex companies offer a free metatrader 4 or 5 trading platform to download so you can get an idea of how forex trading works live on the hardward that professionals use.
Paper trading is basically testing your strategy or ideas out in demo. Its a term borrowed from stock market trading. Demo forex strategy testing is the best way to get an idea if you have the nerve to make it in forex.
It is best to remember that demo is always different to live and there is an emotional content involved especially in using your own money.
Why Use The Forex Strategy Journal
First of all research how to use your trading platform and literally play with it. Read the notes and the manual completely so you understand how it works.
If you don’t understand your platform you can’t trade efficiently.
Secondly read up on some strategies. There are many out there although many new people will start with simple buy and sells just by gauging the market over time.
Identifying trends is paramount to trading success and then once a trend is identified picking your in and out point to ensure full potential of your trade is also wise as part of your forex strategy.
Once you have a strategy you are going to try write that strategy name and a short description that may help in later reviewing your notes in the Forex Strategy column.
All trading platforms record dates, times, opens and closes including profit and loss so this isn’t necessary to record. We only record the date so we can see what we were doing for review later. Some people will also put a trade id in here too just in case they wish to drill down to their actual trades.
Fill in the What You Did Right column with what you think you did right. Include how you felt at the time as that can factor into decision making.
Do the same for what you did wrong. Be honest here as you don’t want to fool yourself when it comes to using real live money.
Now fill in what you could have done better. Identifying that will help you immensely in creating focus for your future forex strategy.
Over time the journal becomes your trading bible on how to make better and better informed trades.
Best Forex Strategy To Become Professional
When you trade forex for a living, it is your key supply of revenue, and your duty not to place your account in unnecessary jeopardy.
When starting out only trade money you can afford to lose. If you can’t afford to lose any money then its best to start trading on a demo account to get your skills up initially.
The fundamentals behind a profitable trading method are incredibly precise and little alterations will influence all final final results.
When starting out it is considered wise to use a stop loss when employing any forex trading strategy.
Trade to your plan and plan your trade.
How to plan a trade?
First, you will have to have a good understanding of forex strategy to ensure that you are enabled as a trader.
The best to get understanding of any forex strategy is to learn by following a mentor.
The best mentor is a skilled forex strategy builder mentor as they will prepare you for all aspects of forex trading.
How do you find a forex trading mentor?
The easiest way is to find someone whom has created a complete course for you to follow.
Looking over the shoulder of a skilled mentor will enable you to gain great understanding of what is happening in a short time.
The transmission of the skills necessary to have a simple forex strategy happens a lot easier when you are able to see and hear the traders mentality when in planning and executing a trade.
Learn forex from a proven mentor all your forex strategy secrets and there is no looking back.