After Mind and Money, the third pillar of success in forex trading is Method which stands for trading strategy used by traders. Although there is no 100% accuracy trading strategy, there are several strategies with high enough accuracy that allows you to generate profit in the Forex market.

After Mind and Money, the third pillar of success in forex trading is Method which stands for trading strategy used by traders.

 

Method (Trading Strategy)

All traders always want to find the Holy Grail of trading strategy, whether it really exists or not. Method or strategy is one of the factors that determine the success of a trader in the Forex trading. Many traders, both novice and experienced, look for the perfect formula to predict the market with 100% accuracy. But the truth is there is no perfect strategy! Forex market moves every moment, prices fluctuate all the time, and market conditions change over time. No one can predict the market with 100% accuracy!

Overcome The Odds Of Forex Trading


Although there is no 100% accuracy trading strategy, there are several strategies with high enough accuracy that allows you to generate profit in the Forex market. Therefore, Mind, Money and Method are 3 important points you should consider to achieve success in the Forex market.

 

Old Question: Technical or Fundamental?

There are 3 types of trading analysis traders base their decisions on:

  1. Technical
  2. Fundamental
  3. Combined technical and fundamental

Each type of trader has a distinctive difference in the interpretation of the market based on the decisions they make.

 

Technical Trader

Technical traders believe historical data has a major role in predicting market movements. A technical trader will usually use chart analysis, support and resistance levels, and trend lines to execute their trade.

Almost all traders use technical analysis to assist them in making decisions. Technical Analysis in the Forex market is very popular among traders who believe that the market will move according to their wishes and the response of technical traders is almost predictable, because they see the same chart and use the same technical tools each time they trade.

 

Fundamental Trader

The second category is the fundamental traders who focus on a number of economic news and information related to a country with a pair of money that they want to enter the trade.

Fundamental traders believe the currency pair moves based on the data of economic or geopolitical situation, regardless of the bank's intervention, the country's gross income, unemployment, interest rates and others. They are also concerned about the political decisions regarding the monetary policy of a country.

 

Combined Technical and Fundamental

There are many advantages of analysing the Forex market from the two sides and there will be a lot of restrictions if only one type is used to predict the market. Highly effective traders typically use a combination of technical and fundamental analysis to predict market moves and make decisions based on such matters.

 

Trading Strategy Is Not The Same For All Traders

I believe the success factors in Forex trading are the strategy used by traders and the personal characteristics of each trader respectively. Some strategies might work well on a number of trades but will not be the same result with other trades in a given period. This will certainly confuse people, where if a strategy works for a number of traders then the strategy should also work for other traders. In Forex trading, a lot of factors that affect the results and performance are emotional aspects of traders including, psychology, trading time frames (schedule based), rules of money management used (whether the trader can follow them consistently), lifestyle, access  to capital, and other personal influences.

Therefore, take your time to learn trading strategies which are good and suitable for you. Make sure you feel comfortable when trading using the strategy. Remember, each trader's trading strategy is different. If you remember the 3Ms, Mind, Money and Method, I believe in the end you will be a successful trader and successful among other traders.

Good luck!