Are you a fly by the seat of your pants kind of person? Does your gut drive your wallet rather than a proven strategy? This might work when buying a plant or a CD of music from your favorite artist but when it comes to Forex trading, strategy wins out over gut every time.
The difference between the 70% who fail in Forex trading and the 30% who succeed and make a boatload of money, I assure you is not simply gut. At the core of those who are successful in this business is a currency trading strategy – one proven, time and after time.
Anyone can make a few trades, maybe even make a little money, teach a course and say they have a “proven” strategy. Anybody whose ideas and strategies are worth teaching are going to be explained in plain English. When I did my research for a currency trading strategy, I found site after site that reported having a proven strategy, one that was guaranteed to make me millions. I learned nothing of this person’s strategy, how much money he’s made (vague numbers like “your piece of the $3 trillion pie) or I’ve made a ton of money, or my cousin is a proven winner in Forex trading, weren’t enough to make me sink my money into his pocket.
To adopt a successful currency trading strategy, it requires at minimum:
o Knowledge of Forex
o Understanding the inter-dependencies between one currency and another
o When it comes to Forex, “what happens in Vegas, doesn’t stay in Vegas”, instead what happens to the dollar affects the Euro, the Yen, etc. and vice versa
o Knowledge of how the market works
o Diverse range of technical analyses
o Strict guidelines that you adhere to
o And risk management
o Always have a fall back plan
As I say, this is a baseline. To develop a strategy, this takes time and experience. I recommend first taking a class in Forex trading. This is not some class that is taught by some guy. I am talking about a class that is taught by someone that can offer you specifics about how he or she made money using the strategy that they are teaching. If you can’t understand the method being offered, in plain English, don’t take the class. Ultimately, if you aren’t sure what the company’s introduction is stating, you will continue to be lost and you won’t be able to apply this to your strategy.
As with anything in life, a currency trading strategy is not one that’s developed “nilly willy”. At minimum the course will cover all the aspects and more of what I described above. When you walk out of that class (whether it’s given face-to-face or online), you should have the tools to start applying to your strategy, which develops over time. Whether you use complicated or simple charts will come after a certain amount of time and success. Strategies take time to develop, so patience is going to be your best friend.