If you want to make money in forex trading you need to have a soundly based forex trading strategy. This is far easier to achieve than many traders think it is and here we will show you how to build one in 4 simple steps.

1. Success Comes From Inner Understanding

To succeed at forex trading you need to do it on your own and understand EXACTLY how and why your system works.

Even if you follow a vendor or someone else’s currency trading system, you can’t simply follow it you must learn it and have confidence in it.

If you don’t understand how your trading system will help you succeed, you won’t have confidence in it which will lead to a break down of discipline if you hit a losing period.

Keep in mind if you don’t have the discipline to follow your trading method, you don’t have a method!

2. Keep It Simple & Work Smart

Many traders believe the more effort they put into their forex trading strategy the more they will make – this is not true. You get rewarded for being right with your trading signal and that’s it.

Other traders think the more complicated their system is the more chance it has of succeeding but again – this is not true.

All the best forex trading systems are simple and this means they have fewer elements to break and are more robust in the face of brutal market conditions.

This is actually good news, as you need to work smart and not hard to succeed.

Simply focus on the right areas and learn them. If you do this, it will lead you to currency trading success.

3. A Successful Trading System

Here we can’t give you all that goes into a successful trading system – but we will give you some important basic elements you need to keep in mind when building one.

- Do not day trade, as you are guaranteed to lose. All short term volatility is random and you cannot get the odds on your side, either swing trade or follow long term trends.

- Base your system on the concept of support and resistance and breakout methodology.

- Do not predict with your system. Use momentum oscillators to confirm each and every trading signal.

If you predict that’s simply hoping or guessing and you won’t win.

Trade the truth of price action and confirm.

- Always place stops and assume the worst eventuality – you need to protect what you have above all else. As one trader I once knew said:

“If you take care of the losses the profits will look after themselves”.

4. The crucial Point You Need to Understand!

In forex trading 95% of traders lose.

This is simply in most instances down to the fact they don’t work smart and learn the right information.

They therefore don’t have confidence to apply their system with discipline.

You need to understand as part of your forex education that your method is important – but you need the right mindset to apply it.

If you want to learn currency trading you can, in fact anyone can – but you must learn how to trade currencies the right way and build a logical, simple forex trading strategy which, takes into account all the points we have made above.

If you want a successful FOREX trading strategy, you should incorporate the following tips into your existing strategy – you should then become a profitable currency trader. The aim is not to just to make money, but to make big profits consistently.

Six Essential FOREX Trading Strategy Tips:

1. Get a Method you have Confidence in

You need to have total confidence in your method – so you can follow it with discipline.

Pick a simple, technical method – simple methods work best, as they’re more robust in the face of brutal market conditions – complicated methods tend to break.

Just use a few rules and parameters, and they should work across all markets – a technical trading system should work on ANY market that trends.

2. You need to have the Mindset to Take Risks!

You will read a lot about money management – but keep in mind risk = reward.

If you don’t take reasonable risks, you won’t make big profits.

2% is a commonly touted figure to risk per trade – but if you’re trading $10,000 that’s just $200.

Risk more if you’re confident – 10% is fine – you just need to be selective with your trades. You can have the best FOREX trading strategy, but you need to take calculated risks to make big gains.

3. Don’t Trade Frequently

The good trades only come around a few times a year, so focus on them.

Many traders think there are good opportunities everyday – there aren’t.

There’s no correlation between how often you trade, and how much money you will make – if you want to make big profits, you need patience.

4. Only Focus on the Long Term Trends

Forget day trading, and focus on the longer-term trends only – how can you make big profits in a day? – You can’t. Don’t forget you have to cover your losing days as well.

Always remember – brokers interested in making the maximum amount of commission, perpetrate the make money by day trading myth.

Currency trends last for months or years – focus on them, and milk them for all they’re worth.

5. Trade in Isolation

Don’t discuss your trading with anyone – the only way you’ll make big money is by doing it by yourself.

Have confidence in your ability and don’t let anyone put you off – this is an essential character trait of all great traders.

6. Work Hard not Smart

Many losing traders think the more effort they make with their FOREX trading strategy, the greater their trading skills will become – this is not true! You can learn a method in a short period of time, and if you have a simple robust method, you can do your analysis in about 30 minutes a day – and that’s it!

A Strategy for Big Gains

So there you have it – a FOREX strategy designed to make you big profits.

Many of the above tips are not conventional wisdom – but keep in mind that 90% of traders don’t make big gains – and they follow the herd.

Step away from the crowd, and incorporate the above tips into your existing FOREX trading strategy – you could become very rich!

By: Stephen Todd

Swing trading is a simple to understand way if trading which is ideal for novices – its exciting its fun and as trades open and close quickly, it requires less discipline than long term trend following. Lets look at a simple Forex swing trading strategy I have used for twenty years that can help you achieve some great Forex profits.

First let’s look at the logic of swing trading; the logic is based upon the fact that humans make markets and they will always push prices to far up and to far down due to the emotions of greed and fear. You will see this time and time again in any trend, as prices rise or fall, to quickly and then come back to more realistic levels.

Your aim as a swing trader, is to sell into overbought levels and buy into oversold levels and make a quick profit, as the price retraces back to fair value – so how do you do this?

Watch for a price spike up or down and look for a level of support or resistance to buy or sell into. You then need to check price momentum and get some momentum indicators to gauge how overbought or oversold prices are and two good ones to learn are – the stochastic and RSI.

These indicators and the way to use them can be learned in a few hours and we have covered them in other articles, so look them up and learn them.

You can simply see from there set up, if prices are overbought or oversold and you then wait for a move to be confirmed. In an up trend, you would look for price momentum to fall into the level of resistance you think will hold. As soon as momentum starts to drop, you enter a trade and put your stop behind resistance next, you need a target to aim for and take profit.

A good profit taking area which normally represents fair value in a strong trend is the 20 day moving average and you want to take your profit before it hits this level. Swing trading profits can soon disappear, so you want to get out before the level is tested – Why? Because if it is a strong trend, prices will bounce back from it.

When you get close to the 20 day moving average and have a good profit, liquidate your trade and wait
for the next one – it really is that simple!

A typical swing trade will last a day to a week at most and if you do it correctly, you will have low risk, high profit potential and the ability, to generate yourself a great second income in around 30 minutes a day.

By: Kelly Price