Develop a Forex trading strategy

The applied Forex signals should fit one's own trading strategy. But how do investors develop the right approach and strategic direction? Basically, it is recommended that every investor knows what investment horizon he is pursuing and what his risk tolerance is before he starts trading. Furthermore, it is important that consistency prevails during trading activity. This means, among other things:

-Continuous trading documentation
-Regular review of the strategy and adjustment if necessary
-Constant further training

Those who keep a trading diary record all their trading steps and can later draw simple conclusions about the success or failure of individual positions. The trading diary is not only recommended for beginning investors, but is also used by ambitious investors for self-monitoring.

Trading strategy depends on various factors
The trading strategy depends on several factors. These include, above all, one's own willingness to take risks, the investment horizon and the capital available. Forex trading offers many possibilities, although not all currency pairs are equally suitable for all trading strategies and trading types. Major currencies are often more liquid and less volatile, so they are mainly used by less risk-averse investors. However, the profit opportunities and the Exness คือ with major currencies are not always as great as with minor currencies or exotics. Here, risk-ambitious investors can take their chances by risking more and, at best, making bigger profits.

Capital decides on trading strategy
The capital available is also important for the development of a trading strategy. What liquid funds can I use to work on asset accumulation? If, for example, investors have little room for manoeuvre, it is advisable to focus mainly on major currencies due to the lower risk and possibly take advantage of smaller profits. This can make asset accumulation take much longer, but it is more continuous and secure. However, we would like to mention at this point that no investment is without risk. Therefore, investors should always be aware of the risk and trade foreign exchange with loss limitation.

Investment horizon
The investment horizon also determines the trading strategy. Do I want to realise profits quickly (possibly within one day) or do I have more staying power? A short-term investment horizon has the advantage that investors can realise quick profits and the chance of losses is more calculable. On the other hand, those who opt for the longer-term investment horizon should be aware of the increasing risk, because a lot can happen in the price trend in a few days or weeks.

Test the strategy
Once you have worked out your forex strategy, you should first test it. This is possible with a demo account, which is available free of charge with many Forex brokers. The test situation quickly shows whether the trading strategy can actually be promising or whether there is potential for improvement. In order for the data of the demo account to be comparable with a live account, both should work on the basis of an identical data basis (at best real-time data).

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