How To Setup Your Own Forex Trading Strategies
May 12, 2009 by Kelvin
Filed under Forex Strategies
If you have been trading forex for a while, you must have known the importance of having your own forex trading strategies. Your forex trading plan is actually a compilation of your forex trading strategies and it will determine the way you are going to trade.
For those of you who are new to forex trading, you may find it hard to create your own forex trading strategies. However this is something you must not miss if you plan to trade currency for a living.
Here are how you can setup your own forex trading plan:
1) Choose Your Trading Methodology – There are 3 main ways anyone can trade forex and you must decide what kind of trader you want to be. You can be a Scalper who scalp the market making 10 to 15 pips everytime and you usually enter and exit a trade within minutes. You can be a Day Trader who will usually take profits of around 50 to 100 pips and you usually enter and exit a trader within hours. The last type of trader is Position Trader, this kind of trader usually monitor their trades every few days and they usually take profit around 150 to 500 pips or more. Therefore you need to decide on which type of traders you want to be.
2) Choose Your Forex Indicators – Once you decide on the type of traders you want to be, you need to select a set of forex indicators that you are happy to work with. Personally, I always prefer a selection of some leading and some lagging indicators to get a better feel of the market.
3) Choose Your Time of Trading – The best time for trading EUR/USD is at 3pm eastern time where London market is opening. The london market alone accounts for majority of the price movement for EUR/USD. Therefore if you are looking into trading the EUR, you can trade around that timing.
4) Look For Confluence of Events – This is by far the most useful forex trading strategies I have incorporated into my trading plan. What confluence of events is looking for is for all the indicators and patterns to give the similar signals for me to place a trade. Whenever there is a confluence of events, there is a higher chance that the trade will become profitable.
These 4 tips are how you can setup your Forex Trading Strategies for profitable trades. Take your time to digest and create your own forex trading plan. You will find it worthwhile.
In addition, I am posting free forex trading signals to help fellow traders like you to improve your trading accuracy.
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