Successful Currency Trading Strategies

Anybody who wants to be successful with forex trading needs to be very clear about their currency trading strategies. And when I say 'successful' here, I don't only mean people who make lots of money but anybody who makes any kind of profit overall, because provided the system and strategies are sound, a small profit can always be scaled up.

A forex trader's strategies should be written down in the form of a plan. It is not sufficient to carry them around in your head because it is too easy to change the rules any time you feel like it. They need to be written down and placed on the desk in front of you and reviewed constantly.

The currency trading strategies that need to be written into this plan include all aspects of the forex system that is used. This includes the signal(s) to open a trade, the position size, the stop loss and the profit target when you will close a successful trade. Depending on your system, these may be the same for every trade or they may vary according to the signal. If they vary, be sure to write down exactly what is different and under what conditions.

In addition, it is important to have goals for your forex trading. Here I'm not talking about profit targets in monetary terms. Most beginners and some experienced traders do set themselves a monetary target such as $x in 3 months, doubling their funds every 6 months, or whatever, but these targets are not true goals and often, they are counterproductive.

Yes, we hear a lot about the importance of goal setting but having that type of financial goal over a certain time can actually harm your trading. It can have the opposite effect and make you lose money. The reason being the time pressure. This adds more stress to forex trading which, less face it, is high enough already.

Imagine a situation where you have set a target of doubling your money every 6 months. Say 5 months has passed and you are not close to that goal. You have made profits, but you have only half of your target. You are clearly not going to reach your goal unless you start taking huge risks - risks that might wipe out all the profits you have made so far and perhaps deplete all of your funds.

In forex trading, it is important to accept that any profit is good profit, and not set yourself up for failure by specifying that you have to make a certain amount in a certain time. Instead, set goals that are broad. For example, set a goal that you want to master the use of a certain indicator within the next 2 months, or read and test the system described in a certain book or ebook. When you set this type of goal, your currency trading strategies are much more likely to lead you to success. Small steps to achieve big gains!