Behind this simple strategy there are certain fundamentals to support. Here are three examples:
Simplicity, and risk management of your exhibition are three crucial concepts of forex trading.
basics strategy : Simple: apply an ordinary breakout strategy.
Risk Management: put a stop to a tightly coupled ratio profits / losses low but positive. We seek in this case the relevance ratio with a good number of wins / number of losses.
Managing Exposure: giving a nearby object, try to spend as little time as possible in position on the market, which is to manage exposure.
Obviously, currency markets leads us to experience different kinds of movements thus meet different configurations.
1. First case: the false signal, our sworn enemy - When you decide to trust a strategy of breaking (ie breakout), you must admit and accept that you will encounter frustration. Levels of breakage are not an exact science and it often happens that we place automatic orders, and who are waiting to be triggered prematurely.
2. Second case: the trailing stop, our guardian angel - Indeed, for most positions, it is recommended to place a 'trailing stop' to lock in maximum gains. Thus, as and when the price rises, the stop is lifted automatically protecting the gain.
Such protection, which automatically follows the positive development of your trade is essential in this market. It is strongly recommended to use for your investments, but especially when you adopt a strategy of short-term, aggressive markets.
3. Third case: Achieved - Do not set target is to let chance take the place of reason. When a target is reached it is usually best to stick to his plan trading. For example, a pair enter into consolidation and suddenly you see a break of major support meaning and some of the players have exhausted their ammunition and prefer to leave out to opponents yet. Typically, the following consolidation is an area where many stop losses will be executed.
Two allies to Success - The precision and long-term
Compliance with rules you set for yourself is essential to be able to defeat the markets. You have probably often been explained the importance of developing these rules before you even get your orders to buy or sell. Rigor is therefore required not to deviate from the path to profits.
Your objectives and performance, even if it is imperative to regularly measure, must be reflected and analyzed in the long term. Only full trust in your trading method may lead you to properly manage the difficult phases of repeated losses.
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