How to Learn Strategies
Once traders have completed learning about the basics of the market, this may include basic forex terms and basic forex concepts such as currency pairs, exchange rate, currency quote, forex spreads, forex pips, leverage and margin traders should move to the next advanced step of learning about strategies. Learning & understanding strategies will require traders to take time to learn about trade strategies so that they can know about how they can come up with their own.
Traders can learn how to develop & come up with their own trade strategies by first of learning about the oftenly used strategies in market. After reading about the oftenly used strategies in market traders can then come up with their own strategies as they will have learned the basics of how to come up with a strategy.
The most common strategies in market are:
| Moving Average Strategies |
· MA Strategy MACD Strategy |
· MACD Strategy RSI Forex Strategies |
· RSI Strategy Bollinger Band Strategy |
· Bollinger Bands Strategy Stochastic Oscillator Strategy |
| · Stochastic Oscillator Strategy |
Once a trader learns the basics of how to recognize simple patterns & trade these chart patterns using strategies, the traders can formulate complex systems that they can use to trade the currency market. Traders can then use these strategies to identify entry and exit points when they want to open trades.
Traders must consider several factors before coming up with their strategy. Traders will have to determine the points at which they will be buying or selling. Traders will have to determine their take profit targets as well as their stop loss levels. Traders also will have to determine the money management rules that they will use when trading with their strategy. For example a trader might choose to use the 2 % money management rule which says that a trader should not risk more that 2% of their account equity on 1 single trade. The trader can also use the high risk reward ratio money management rule, for example a trader using high risk reward ratio of 2:1 - means that if a trader sets their stops at 20 pips, then they will set their take profit level at double this amount, this means the trader will set their take-profit level at 40 pips.
After determining all these & choosing the strategy a trader will then write down their strategy & the rules of these strategy so that to come up with a complete system to trade currencies with.
