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 like 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 and understanding strategies will require traders to take time to learn about strategies so that as they can know how to come up with their own.
Traders can learn how to develop and create their own trading strategies by first of studying about the oftenly used strategies in market. After reading about the often used strategies in market traders then can develop their own strategies as they will have learned the basics of how to create a strategy.
The most regular strategies in market are:
| Moving Average Strategies |
· MA Strategy MACD Strategy |
· MACD Strategy RSI Forex Strategies |
· RSI Strategy Bollinger Bands Strategy |
· Bollinger Band Strategy Stochastic Oscillator Technical Strategy |
| · Stochastic Oscillator Technical Strategy |
Once a trader learns the basics of how to recognize simple patterns and 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 and also their stop loss order 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 forex trader should not risk more that 2% of their equity on 1 single trade position. The trader can also use the high risk reward ratio money management rule, e.g. a trader using high risk reward ratio of 2:1 - means that if a trader sets their stops at 25 pips, then they will set their take profits at double this stop loss amount, this means the trader will set their take profits level at 50 pips. This gives a risk reward ratio of 2:1.
After determining all these things & choosing a trading strategy, a trader will then write down the trade signal rules of this trading strategy so that as to come up with a complete trade system to trade currencies with.
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