How to choose trading strategies?
The most important thing about trading strategies is that you need to have a good one from the very beginning and stick to it until proven otherwise. It is worse to have no strategy whatsoever than to pick one that is not viable on the long run, or one that has serious limitations. In the absence of a clear plan, you will find it difficult to set clear goals and milestones, which will make the entire Forex adventure less cohesive.
You don’t even need to have a very complex strategy at first and since most newcomers do not have their own system, there is nothing wrong in drawing inspiration from more experienced traders. These guys have made it that far because they always knew where they were heading and didn’t lose focus for a minute, which enabled them to offset minor loses and prevent a bankroll ruining meltdown.
Those who prefer to trust solid facts and ice cold numbers, will cherish the technical analysis and incorporate it into their strategy. The advantage of this approach is that you don’t have to have a lot of experience and knowledge, just access to relevant information and a system to make the most of all this data. Predicting trends is not an easy thing to do, but the technical analysis makes it possible, while the various indicators allow you to determine the strength of each trend.
Charts and numbers are pretty much all you need to master technical analysis and with new software and instruments developed to make your mission easier, even beginners can be successful at it. There will be some to tell you that technical analysis can only carry you that far and without using fundamental analysis as well, your trading strategy will fail. This is not entirely true and you can stay profitable even if you rely solely on technical analysis, but there is always room for better.
Building your trading strategy on fundamental analysis is not a recommended thing for beginners, but integrating new elements later on, is beneficial. The political context, economical issues, interest rates and trade agreements can be more significant that simple oscillations in the pips. If you master this type of analysis you will virtually double the amount of information that you have before placing an order, which will greatly increase your chances of success on the long run.