5 Steps to Build your Forex Trading Strategy


Presentation Description

Whether you are beginner or experienced traders, here’s how you can build your forex trading strategy and test the profitability of your forex trading strategy in just five steps.


Presentation Transcript

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Steps to Build Your Forex Trading Strategy T o trade successfully in the forex a set of proven trading strategies and solid risk management rules to stick to it. Whether you are experienced traders or beginner traders here’s how you can build your forex trading strategy and test the proftability of your forex trading strategy in just fve steps: 5 Steps to Build Your Forex Trading Strategy 1. Understanding Technical Analysis T echnical analysis involves using indicators and price chart to analyze market direction. T echnical analysis helps you identify the possible entry and exit points for trading positions. Contrary to fundamental analysis technical analysis mainly focuses on market prices and pattern. Fundamental analysis on the other side is about the factors that drive the market prices. These both analytical methods can be used combined or independently. T echnical analysis focuses on price patterns and timing that’s why it is often considered a neutral tool. T o fnd forex trading opportunities based on technical analysis you need to analyze the current market price and need to identify the possible target levels. While the technical analysis does not guarantee results it provides a calculation of the possibilities for diferent market moves. Click on below link: Technical Analysis https://youtu.be/n5UI2kypn4I

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2. Understanding Fundamental Analysis In the previous step you learned that technical analysis is focused mainly on price actions and trends. Fundamental analysis has a diferent approach to evaluating the markets ofering a holistic picture of the market strengths and weaknesses. A fundamental analyst takes a look at key events that could afect a particular currency’s strength or weakness. Those include political and economic data as well as natural disasters. Fundamental analyst utilizes all the available information in estimating a currency’s strength. Attention is focused on key economic reports and data including GDP and unemployment data production data and announcements of interest rates. 3. Choose Your Entry and Exit Points Forex traders are exposed to trading risks regardless of their approach. That’s why understanding price action is key to determining when you place your trades and when you exit a position. Here you will learn four key price actions concepts used in the forex trading to identify entry and exit points. 1. Support Resistance Support and resistance refer to important trading levels where the price has reached and bounced back multiple times. You think of them as key points where demand and supply meet. 2. Breakouts It is a break through an established support or resistance level. Breakouts are strong signals especially when confrmed by other indicators like gaps. 3. Gaping Action Gaps are important as they signify that buyers or sellers are making their moves. But you have to confrm a new trend using multiple indicators before you jump in. 4. Sideways Market A forex market trades sideways refers to price action within a narrow range of strong support and resistance levels. When a market trades sideways then traders are preparing for a breakout. Click on below link: Entry and Exit Points Forex Trading Strategy https://youtu.be/_WZhNsk5Hd8

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4. Managing The Trading Risk The market is quite volatile and bigger your potential gain that higher the risk. Here are few tips to keep the risk in control. 1. Avoid Over-Trading Although volatile markets can be tempting a good rule of thumb is to avoid the risking more than 2 of trading account balance on any single trade. Trading more than that would expose you to failures that are difcult to recover. 2. Minimize Losses Using Setup Stop Loss Orders Success in trading does not consist if winning trades just. On the contrary it is the aggregate of winning trades and losing trades. That’s what makes stop-losses a key factor when it comes to proftability. Setting up stop-loss orders will also eliminate the need to monitor your position constantly. 5. Test Your Trading Strategy While you cannot replicate the risks involved in trading with the real money a demo environment can help you test the soundness of investing strategy. Every new strategy needs to go through a period of trial and error method before you can confdently invest your hard earned money on it. Click on below link: Back Testing a Trading Strategy Works https://youtu.be/Wjcyh04EjQI

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