Forex trading is complicated.
The amount of people who offer the latest “incredible system” probably belie the difficulty that traders face.
1. When are you going to place a trade?
2. What are your targets/stops?
3. When do you abort a trade?
4. What conditions or rules do you have about staying in or getting out?
The best plan you can have is actually to pick a trading style and system that suits your temperament. If you know other’s ask your friends. The truth is that the big rally trades, the fast, make 100 pips in 3 seconds trades are rare. Most trades that make that sort of pips take at least 3 to 5 days in current market climates.
When you have picked your trading system WORK WITH IT FOR 1 YEAR. You need to learn how to deal with it in all kinds of trading environments. Sometimes the markets are flat, there is low participation so it is much harder to trade, the market won’t commit.
The best way to fail with the Forex is never to have a system. I have met a few traders who upon losing a lot of money said they went on “gut-instinct” as a system, gut-instinct is really the biggest killer in the forex.
If you have set up a trade correclty and you are following your system and it starts going against you, only pull out if you have NON-EMOTIONAL reasons to do so. If the pair has moved south when you were in a long, look for the reasons for this. If it is someone making a speech the chances are it will return to price.
I’m sitting here now with 118 pips profit in 3 trades, one losing -5 pips and the others winning 78 pips and 44 pips. One trade has been on 6 days, another 24 hours and the last one just went on. All of these are “strobot” trades.
Getting to this point has been very painful. You have the realisation that the markets are hard to trade. That everyone has losing streaks and when you hit a winning streak you must understand what you are doing right.