How to Learn Trading Strategies
Once traders have completed learning about the basics of the forex market, this may include basic forex terms and basic forex concepts such as currency pairs, exchange rate, currency quote, forex spreads, forex pips, leverage and margin traders should move to the next advanced step of learning about trading strategies. Learning and understanding trading strategies will require traders to take time to learn about trade strategies so that they can know about how they can come up with their own.
Traders can learn how to develop & come up with their own trading strategies by first of learning about the oftenly used trading strategies in the FX market. After reading about the commonly used trading strategies in the forex market traders can then come up with their own trading strategies as they will have learned the basics of how to come up with a trading strategy.
The most common trading strategies in the forex market are:
Moving Average FX Trading Strategies |
· Moving Average Strategy MACD Forex Trading Strategies |
· MACD Strategy RSI Strategy |
· RSI Strategy Bollinger Band Strategy |
· Bollinger Bands Strategy Stochastic Oscillator FX Trading Strategies |
| · Stochastic Oscillator Strategy |
Once a trader learns the basics of how to recognize simple patterns & trade these chart patterns using trading strategies, the traders can formulate complex trading systems that they can use to trade the currency market. Traders can then use these strategies to identify entry and exit points when they want to open forex trades.
Traders must consider several factors before coming up with their strategy. Traders will have to determine the points at which they will be buying or selling. Traders will have to determine their take profit targets as well as their stop loss levels. Traders will also have to determine the money management rules that they will use when trading with their trading strategy. For example a trader might choose to use the 2% money management rule which says that a trader should not risk more that 2% of their account equity on any one single trade. The trader can also use the high risk reward ratio money management rule, for example a trader using high risk reward ratio of 2:1 - means that if a trader sets their stops at 20 pips, then they will place their take-profit level at double this amount, this means the trader will place their takeprofit level at 40 pips.
After determining all these & selecting the trading strategy a trader will then write down their trading strategy & the rules of these trading strategy so that to come up with a complete trading system to trade currencies with.
