There is an important reason why successful forex trading always requires a strategy; it is not a magic forex secret trading formula it is because it works.
Before you start trading you need to have a Forex trading strategy and if you want to trade profitably, you will have to follow your trading plan religiously.
Due to the volatility of the Foreign Exchange Market it is sometimes very difficult to react coherently in a fast move and in order to make the right decision in such conditions it is vital to follow a trading plan.
In the middle of a trading day a trading strategy is essential due to two key factors:
It takes away emotion which is not a good attribute to have when you are under pressure and need to think clearly and rationally.
A Forex trading strategy means that you do your research before you place a trade and therefore do not have to analyze complicated graphs in real-time and avoid confusion and make the wrong decision. You start to work on auto pilot and it becomes forex easy trade.
Traders have a strategy its not forex secret trading
Money management is an important part of any succesful forex trading strategy. Knowing how much money you are prepared to lose dictates the strategy and the path that you will follow. It is not a secret trading strategy, it is common sense.
For example, putting on a strategic position for a longer period such as a year necessitates a stop loss further away than if you embark on a short term position. The logic behind this is you need to give yourself a chance of a big move happening and don’t want a stop loss being activated too quickly before any move has happened.