Successful Forex Traders Should know Four strategies

Good trading comes from a combination of talent and hard work.By blending good analysis with effective implementation, your success rate will improve dramatically. Here are the four strategies that can  serve you well in markets.

1.Approach

The first step is to align your personal goals and temperament with the instruments and markets that you can comfortably relate to. Begin by assessing the following three components.

(1) Time Frame

The time frame indicates the type of trading that is appropriate for your temperament.  Trading off of a five-minute chart suggests that you are more comfortable being in a position without the exposure to overnight risk. On the other hand, choosing weekly charts indicates a comfort with overnight risk and a willingness to see some days go contrary to your position. Remember that the opportunity to make substantial money in the markets requires time. Short-term scalping  means small profits or losses. In this case you will have to trade more frequently.

(2) Methodology

Once you choose a time frame, find a consistent methodology. For example, some traders like to buy support and sell resistance. Others prefer buying or selling breakouts. Yet others like to trade using indicators such as MACD, crossovers etc. Test a few strategies and when you find one that delivers a consistently positive outcome, stay with it and test it with a variety of instruments and various time frames.

(3) Instrument

Certain instruments trade much more orderly than others. Erratic trading instruments make it difficult to produce a winning system. Therefore, it is necessary to test your system on multiple instruments to determine that your system’s “personality” matches with the instrument being traded. You should also test multiple time frames to find those that match your trading system best.

2.Attitude

Attitude in trading means ensuring that you develop your mindset to reflect the following four attributes:

(1) Patience: Once you know what to expect from your system, then have the patience to wait for the price to reach the levels that your system indicates for either the point of entry or exit.

(2) Discipline: Discipline is the ability to be patient – to sit on your hands until your system triggers an action point. It is also the ability to pull the trigger when your system indicates to do so. This is especially true for stop losses.

(3) Objectivity: Objectivity also depends on the reliability of your system or methodology. Your system should be reliable enough so that you can be confident in acting on its signals.

(4) Realistic Expectations: Being realistic means that you cannot expect to invest $250 in your trading account and expect to make $1,000 each trade. Short-term time frames provide less profit opportunities than longer term, but the risk with longer-term time frames is higher.

3.Discrimination

Different instruments trade differently depending on who the major players are and why they are trading that particular instrument.  If you can determine what motivates the large players then you can often piggy-back them and profit accordingly.

4.Management

Since there is no such thing as only profitable trades, no system will trigger a 100% sure thing. Therefore, the art of profitability is in the management and execution of the trade.  Successful trading is all about risk control. Take losses quickly and often if necessary. Try to get your trade in the correct direction right out of the gate. If it backs off, cut out and try again.