Strategies (our basic approach when trading) -
a. We should decide which approach to use when trading the Forex market -
"Intra-day" trading - using the "smaller" charts (4 hour, 1 hour, 30 mins, and smaller), and includes
"scalping" (many, small trades executed quickly).
Longer-term trading from the Day, Week & Month charts (fewer, larger trades executed over a longer period
of time).
Either approach is good, and both offer terrific profit potential - to decide which suites each of us specifically,
we need to try both (preferably in a "demo account").
b. We should ALWAYS use a carefully prepared "Trading Method" or a developed "Trading System" - never just
run "ad-hoc" at the market (this is a sure way to quickly deplete our trading balance).
Our Method/System should include trading tactics that specifically address the current "Market Movement",
ie. "Trading a Trend" or "Trading a Range" or preferably both - different tactics are required for each.
eg. when trading a Trend, it's not a good idea to try to make a profit from every possible point on offer -
ie buy at the exact bottom and sell at the exact top of a market. It is much more prudent to trade the middle
one-third to half of each market move.
c. We should ALWAYS include "Risk/Money management" in our Methods/Systems.
Psychology -
If we prefer to use a "Method" to trade (rather than a System), then we need to work out if we are naturally an
"Intuitive" trader or a "Mechanical" trader, and we should structure our Method appropriately.
We need to be very patient with ourselves and the market when trading (particularly intra-day)
- there is always the pressure to make more profit, and to seek the method/system that does not loose a trade
- there is no such "silver bullet".
It takes time and lots of practice to learn to accept that losses are an every-day & intergral part of trading
- the trick is to ensure our Profits exceed our losses (as a "formula" of trading).
Discipline -
The single, most important discipline that we need to develop is to "Plan each Trade, then Trade our Plan"
- and we must do this relentlessly and without deviation !!
It is just so tempting & easy to make "spur-of-the-moment" decisions that are not part of "the Plan",
and more often than not we loose (this is a particular danger for Intuitive traders).
{for other Trading Elements, please select from blue box - top, right of screen }
Please add your advice & comments to this topic
