What is a forex trading strategy?

A Forex trading strategy is a way or a method which shows you how to trade forex. There are a lot of forex trading strategies available on the net and each and every strategy uses its own indicators and timeframes.

How to use any forex trading strategy?

The following are the main guidelines on how you can use any strategy.

Money Management:

Money management is the most important concept for any forex trader. As many of you know, in forex trading only 5% of the traders win and others lose. The main reason why most of the traders lose in forex is not following the money management. Because of the greediness most people trade using more number of lots and for the first one or two times they might be winning but when the trades go in a reverse direction of their wish, they will either close the trades or the trades will be closed by the broker because of the margin requirements.

How much you can invest for each trade?

The general money management rule, that most of the traders who follow money management is trading with 2% of the amount you have in your account. If you have $5000 in your account, 2% is $100. So trade with $100 only.

Advantage of following money management:

One of the biggest advantage of following money management is, since you will be investing very small amount, even if the trade goes in a reverse direction you can still wait for it to come in your favorite direction and you don’t have to close it in loses. That means you don’t really need to use a stop loss.

You can open many trades at a time. Even if some trades go in a wrong direction, other trades close in profits and this will balance your losses at that time. You can wait for the trades that are in losses to come into profits and then close them as you are strictly following money management rules and invest small amounts.

Count in pips but not the money:

You have to always count the number of pips you are winning but not the money. When you follow money management you will be following some strict rules about the amount you are investing and you might trade with very less amounts of money. So if you count the money you may feel that you are not gaining much from trading. But if you check it correctly over a month, you will know how much you are getting from trading. So instead of counting the money, always count the number of pips you are winning.

Practicing the forex trading strategies:

Any forex strategy that you find, you should practice it first. There are many forex brokers who offer demo accounts and you can open an account with them and practice the strategy.  You have to make sure that you win in demo trading using the particular strategy and you can use it in your real trading.

The above are some of the things you have to follow while working with any strategy.

Forex-strategies-online.com is a forex trading strategies site, where you can find a lot of trading strategies. The strategies are mainly divided into the following.

Simple Forex Trading Strategies – This contains forex strategies that use no indicators at all or very basic indicators.

Medium Forex Trading Strategies – This section contains forex strategies that use the default indicators that are come with any trading platform. This may also contain strategies that use some custom indicators.

Complex Forex Trading Strategies – This section contains forex strategies that use custom indicators mostly.

If any custom indicators are used in the strategies, you can download them for free here.