Simple Forex Trading Strategy

Forex Trading Strategy There are numerous forex trading strategies and many of them pretty good. But what is the best forex strategy to make huge profits? Let’s find out…

Simple Forex Strategy: Concentrate on Money
When you want to develop the best forex trading strategy for making real money, you have to to focus on the money itself and the methods to manage and control money. Of course our primary aim is to create a profitable trading strategy. But you should always keep in mind that a complex forex system or the best forex software in the world will not bring you profits if you fail to manage your investments.

If you are new to forex trading, managing your funds might sounds like it should be pretty simple to do. However managing investment is not a simple skill and everyone is blessed with it. The normal perception is that if you are good with your money and cash flow in general and if you are keeping a good track all your investments you will do well in currency trading as well. This is not always true. Of course you will have an advantage compared to thousands of other traders who can’t handle money at all. However investing your money in a risky market like forex will necessitate a totally different attitude.

Make Money or Avoid Losses?
After trading for some time you will soon realize that one of best ways to make real money with forex is not go for making big money, but just focus on avoiding big losses. When you are starting out in forex trading if your strategy is to go for only big trades, then you are risking too much. Instead concentrate on a series of small wins and completely eliminate losses. You don’t have to worry about occasional small losses which are unavoidable. Eventually with lot of trading experience you will be able to identify big trades. Thus when you begin trading forex your strategy should be to avoid big losses.

You might ask, “Is it not possible to make profits if my forex strategy involves lot of small winning trades and very few occasional big losses?” Of course it is possible that your winning trades can cover the odd big losses. However, this is not the best forex strategy for anyone starting out in currency trading.

Why? Because when a large loss occurs, it is likely to upset you and might cause panic. As a result you will be worried to continue with your existing simple trading system and start thinking of new forex trading strategies which are more complicated. Besides, you will want to recover the money you lost as fast as possible which totally a dangerous situation. Because at this stage you might chose dreadful trading decisions which might result in further losses. The best forex strategy is always to stick to a winning trading system even if it suffers occasional losses. This is the success secret of experienced traders like Chris Lee from Pip Mavens who focus on simple forex strategies.

Forex Strategy: Trading Discipline
Forex trading beginners often get tempted to use maximum leverage on a mini account in an attempt to make big profits. Do not fall for this trap. According to your predictions it may be a perfect winning trade. But you could still end up with heavy losses since Forex market is highly volatile and any unanticipated forex news can lead the market in opposite direction.

When you are a beginner at forex it is always a good strategy to limit your risk to 2% of the funds in your account. So how much will you invest in your forex trading account? There are highly reputed forex brokers like Dukascopy who needs at least 10k investment and there are also other brokers who will let you open a mini forex trading account with few hundred dollars. Though you should not invest more money than you can afford to lose, it is better to have at least $1,000 in your account to do profitable trades.

Recording and Tracking
Like I mentioned earlier the simple forex strategy that is effective is to avoid losses and keep good track of your trades and money. You can make use of an excel spreadsheet to record your opening and closing prices, profit or loss after deducting the spread. You should also try to record the logic behind going for a particular trade such as the indicators that you used. You should follow this even if you are trading on a demo account. Trust me; this simple exercise is worth since within few months you can learn a lot by going through information recorded in this spreadsheet. This simple technique alone will help you to improve your strategy and your simple forex trading strategy will soon become a powerful winning strategy.