Finding your own personal trading strategy is an important step since getting lost in trying new strategies is a distraction that can lead you to bankruptcy.
In forex trading, there are many ways and methods to earn profit. Therefore, what you need to do first is finding your own personal trading strategy, that is a method of trading which is proved to be profitable for you, consistent, and reliable. If you have found one, then success is right in front of you.
What You Need to Know
Before you become a trader, there are some points that you should know. Those are:
- What are forex trading and forex market
- How to search for information and reading market situation
- How to measure your balances/funds, including calculating profit and loss
- Establishing a trading strategy
- Mastering psychology of trading
- Making trading plan
- Trading with discipline
Knowing those points will be very necessary for the next step.
If you already understand Forex and want to know about how these trades done, you can open 'demo account'. Every broker generally offers demo account and introduces how the trade works. The demo account is important since as a beginner could learn and practice how to trade in the real market by using virtual money.
Demo account shows how currencies move in the market. The data shown is actual data. For beginners, practicing in the demo account is necessary before being involved for real. If you underestimate this simulation/demo account, at the moment you trade in the real market, you will be confused and suffer losses. Trading is not only about BUY / SELL, but needs experience. So, feel free to take advantage of this demo account. There is no limit on how long you could use it. If and when you are ready to use real money, you can leave it.
Best Trading Strategy
Another advantage of demo account is, you could use it to establish your trading strategy. How to do it? Don't worry about the difficult terms in forex world. Just make it short and simple, and find one that suit your type and character.
Simple trading strategy doesn't mean that you could easily take advantage in trading. It is called 'simple' because it doesn't include many indicators and only need patience and accuracy in choosing entry points.
The style of each trader is definitely different, as each human is unique. No one is this world has the same fingerprint, and that's also what goes on with trading strategy; each trader has his own trading style as analysis is an art for them. One's trading strategy is not necessarily suitable for you, because of the differences in the amount of funds you have, the ability to bear risks, the time reserved for trading, personality and experiences. So, the best trading strategy for you has to be made by people who understand you best, that is yourself.
On the other side, this doesn't mean the simplest is the best or in the opposite, the most complicated is the best. Each thing is just the same, and the most influential aspect is discipline. Our success depends on ourselves. Even though the method we used is simple, if it works why should you ask for another.
Experience and Discipline
According to what I'm doing right now, trading psychology holds 60 % part in securing my funds. I reached this point after trading for a long time. Therefore the best thing is using experience to explore and find your own strategy. Indeed, there are prices to be paid. Starting with time, energy, mind, and perhaps money. If you don't want to lose too much, you should test the strategy with demo account before going on with the real account. This way, you could make modifications before successfully finding the right one.
For short, use a comprehensible trading strategy and discipline, then surely success will come to you. Many people failed in forex trading as they can't focus, keep looking for the best strategy, when the missing key is not that but a discipline.
For traders who are still looking for trading strategy or trading system, do your search at forums where trading indicators are usually posted by the trading master. Then try to adapt the trading system/trading indicator which is shared and match to their trading style. Afterward, develop it to suit yourself. What will be really fun is watching the development of it from month to month and year to year since the first time it was made. Shared trading system seems to have its own cycle and likely follow the same and repetitive ways.