Forex trading is referred to as day trading because you will always open and close your trades within a 24-hour period. Once you have made a decision to try your hand in forex market, you will need to decide on a forex strategy to use. The system that you choose will need to rely on short-term indicators since your 24-hour trade period is short-term.
Strategy trading will help to keep you from trading on instinct, or price chasing. Both of these are very tempting when you become involved in the market. Both are also equally poor choices. Forex is a market with almost unlimited profit potential and deciding on and using a strategy is a much better system than relying on “instinct” or a feeling.
Once you have decided on a strategy to use, follow it closely. Having a strategy in place to work will help you to follow some guidelines when deciding the proper time to enter or exit a market. Timing is everything and guessing on your timing rather than planning will be nothing more than a gamble and a poor one at that.
The longer you work with a strategy, the easier it will be to recognize the signals that are a part of that strategy. Once you are able to recognize the signals without working through all of the steps, you will seem to be “trading on instinct”. Even at this stage, it is important for you to remember that you are using a strategic system to make decisions. Always remember that it is this system that allows you to make good choices, not instinct. Be very careful not to give in to the temptations of the market.
Three Basic Rules of Day Trading:
1 - Keep Your Strategy Simple:
There are many different strategies available to choose from. When you are looking at a system, be sure that you understand every aspect of that strategy. Currency trading systems rely on being able to read and interpret data before making a decision to enter or exit a market. If the system that you are checking seems too complex, you need to choose a different strategy, perhaps one that is simpler. It is important that you clearly understand any system if you are to implement it correctly.
2 – Get Help When You Need It:
Even the ‘pros’ get help and guidance. Don't believe that getting help is a sign of weakness. Falling into that trap can lead you straight into disaster! Watching the market 24 hours a day is not possible for any of us. Consider using automated trading software. Automated software will watch the market when you can't and allow you to see if you have chosen an effective forex strategy trading system. You will also be able to see the information used by the software to make market decisions.
3 - Stick With It.
This is probably the toughest rule to follow. It seems simple enough, but with a little success, many people start to feel that they can make it on their own. Keep in mind that the point of choosing a strategy to begin with was to make money. Working within the system and learning to recognize the ‘signals’ doesn’t mean that you are now able to ignore your trading strategy. It should mean that you will have more good days trading than bad since you will be able to make good decisions more quickly based on your strategy.
Learn more about forex strategy trading by visiting our website at: http://forex-strategy-trading.com/ for your free starter guide.
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