OMG! This Must Be The Holy Grail Of Forex Trading!

Post on: 29 Июнь, 2015 No Comment

A FOREX TRADING STRATEGY THAT IS SO COMPLICATED WILL NOT MAKE YOU MONEYPERIOD!

These charts above look fancy complex. complicated and maybe even mysterious.

Heck! If a newbie forex trader sees these kinds of charts and trading strategies, he would most likely believe hes found the holy grail forex trading strategy .

Why do some forex traders always keep looking for that holy grail forex trading system?

Why do they always keep looking for the holy grail forex indicator?

Why do some forex traders think that there must be some few elite forex traders out there that hold a secret forex trading system or a secret forex indicator that they dont know about..

Maybe because its a human tendency to believe that theres something out there
that must hold the secret to making money in forex trading
and maybe If you find that missing linkthe holy grail, you will be all right

Really?

Well, I got bad news!

Theres none!

TOP 4 REASONS WHY COMPLEX FOREX TRADING STRATEGIES WONT MAKE YOU MONEY

A complex system is a difficult system in terms of following the rulesit may have many! And when you are trying to analyse a currency for a trading setup, its may not be easy if youve got a very long checklist to follow!
It breeds frustration and you end up not following the rules of the trading system at all.
Analysis Paralysis-if you have a forex trading system that has so many things that you need to do before placing a trade and even if an opportunity comes to take a trade, you dont take it or you may miss it.
After a while, you find that you are mentally spent and when you are not making any money at all from using the system, you start to not follow the trading systems rules at all-you start breaking it!

FOREX TRADING STRATEGIES THAT WORK ARE?

Heres something that no matter what you say (which would be a lie!) is always true:

the mind works better when its not distracted by too many things.

Therefore, keep keep your forex trading simple, which means keep your forex trading charts neat and simple like this:

So if you want to make money in forex trading then you need to:

Use simple forex trading strategies that you understand and can implement easily.
Use Swing Trend Trading Strategies that allow you ride the trend. This increases your odds of success.
Learn to Use Support And Resistance In Your Trading. Why? Because The market makes big moves around these price level.
Learn to understand the big picturewhich means, if you are trading off the 1hr chart, you need to be aware of what the bigger trend is in the 4hr chart or the daily chart.
dont put too many indicators on your chartthe less clutter you have, the better it is for you mind-its REFRESHING!
learn to use price action trading and especially candlesticks .

But all these are nothing if you fail one thingrisk management. You can have the best trading strategy but if you do not apply proper risk management in trading, you will not survive.

For example, you have a $5,000 forex trading account:

if you risk 2 % each trade then you only need to have 50 losing trades in a row to totally wipe out your forex trading account
if you risk 10% each trade, you only need to have 10 losing trades in a row and you are out.
if you risk 20% each trade, that means 5 losing trade in a row and you are busted!

Now, remember thiswhat we are talking about here is risk per trade. But suppose you take 5 trades for the day and you risk 5% each trade and all of them turn out losers, youve just lost 25% of your account in one day .

So what does this mean to you?

It means:

youve got to learn to think in terms of how much you are going to risk per trade
and how many trades your going to take in a day (or week)-you need to set your limit and if you hit that limit, you stop tradingthere will be a better time next time.

For exampleyou made can draw up a risk management plan that looks like this:

you will risk only 2% per trade
and that your daily risk for the day is 6% ( that means you are allowing only 3 trades each day so 3 losing trades for the day and you stop trading)
and you can go a step further and say that you are willing to risk 15% in a week (This means that if you lose 15% of your account during the week, thats it! You stop and wait for next week to trade with a fresh mind.)

If youve enjoyed this article, please like, tweet and share.

Further Resources on this site: