Currency trading usually comprise of several strategies that are productive and lucrative. I just don’t concern which type that you use but once if you don’t overlay your preferred method with the points that I have suggested below, then I strongly believe that the success rate of your strategy may be comparatively very low.
Try to Use Stop Losses always – I simply cannot stress on this more. To use stop losses you need to accept these as a price of doing trade. In the same manner as a shopkeeper need to pay rent for electricity or the building rent, a true trader here should pay stop losses. Generally the fresher’s are not much interested in doing this as several times the cost returns to the initial price of entry and they usually ends up in money. So here the new comers would always feel that this is a mere red spot which is unnecessary for their account. But the real subject is that you should forecast a condition where price fails to return to the entry value and resulting in the wiping out of your account. This is where the importance of a stop loss comes into play. You should keep in mind that trading is not of course a sprint but a marathon in which you have to move on until you learn the trick of trade. And one of the best ways to survive is by the use of stop losses.
Multi-Timeframe Analysis – You might always have a best time frame in your mind to do your trade. Once if you don’t have the plan, then you should attempt for one. This is because, this time frame will help you to do things and learn the pros and cons within the same. But at the same time you should have an eye out of the time frame too to assure yourself that you are on the right track and are not getting to bigger time frame. For instance I could say that I always trade on a quarter charts but used to consult for an hour frame.
Try to be Simple though not too simple – Trading should be done in a simple manner so as to make the decision making obvious and vivid. But keep in mind that confluences are also vital, which means more than one characteristics of prices support a decision on business. Let me give you an example. I will buy a pair if it leaps over the upward sloping or bounce over a support level in addition to the formation of rejection candle.
Learn signal frequency – You need to observe and learn your strategy as your palm. I know very well about the number of signals that my method generates in a trading session. This is because I know the strategy, which again stress on that I don’t over trade. I usually trade two to three signals that my strategy generates but if I go more than that it clearly points that I am overtrading. Overtrading can kill an account as new trade would bring a new risk to our table. As business men we hate risks, isn’t it?
Concentrate on risk and not on profit – When you try to equate trading with risk management, then you could observe the growth of your account. Trading primarily means managing risk. So try to cut short your losses and win trades from the get-go. Be alert to protect you account .I usually moves my SL to the entry if my trade goes into 15 pips, that’s what suits my strategy. You have to protect your account by choosing a track that your strategy would adjust for.