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Have You Prepared Your Forex Trading Strategy?by Wayne Wargo (PenWay.org) After all you have read about Forex trading, do you think you are ready toactually do it? Are you finally comfortable in taking that step forward and begin?There are certain things you must become familiar with before you begin investing.These are significant points to be made. You will have to learn and understand theprinciples behind them so that you feel competent to start trading in the Forexmarket. * Think twice before day trading.So few get to be successful at day trading. Most experts firmly believe that itdoes not work, because the volatility on such a short term varies a lot. You willbe better off with a long term trading ventures where chances of profit aredependable. * Fundamental or technical?Are you a fundamental or technical trader? Where does your strategy lie? It ishard to be both; combining the two paths and methodology are at times nearimpossible and at most difficult. It would be easier to start with a technicalaspect of trading in your strategy. Not only would it take into account humanpsychology, but it will also be easier to work with. * Throw scientific theories away.We all know Forex trading needs an objective point of view. Nevertheless, when itcomes with your personal strategy, it must fit with your assets, investments andplans. That is why it is difficult to rely on scientific theories alone. If therewas truly a successful one, then why isn't everybody a millionaire?The objective part of the equation should be the trading signals you need to usein determining your next move. Now you see that there is balance in the temperingof your strategy. * DisciplineYou work in conjunction with your strategy. Are you disciplined in your tasks? Egomight get in the way of a successful and fair trade. Think about how the marketaffects the design of your trading plan. Be fair and reasonable and you willprofit, being over your head and thinking greedily will get you nowhere but down. * ConfidenceLastly, do you have absolute confidence with your unique plan? Testing and testingagain with present parameters is essential to get that confidence. You may evenwant to start with a small amount first, testing your strategy with as little riskas possible. When it works, resist the urge to change it drastically. Do not overcomplicate your details. Is your strategy designed to use stop losses conservatively?Stop losses are there for your advantage. Use them. Most people place themimmediately after a trade. If you overthink or hesitate a lot, you may end uplosing money. Don't second-guess yourself! * Simple and work reasonableThe design of your Forex trading strategy should be simple, and requiresreasonable amount of input and work from you. Too complex a plan and you mightlose sight of your own unique technique. Too much work will take its toll fromyou, clouding your judgment more and make it difficult for you to reach yourgoals.
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uploaded a new revision for this document (#2)

01 / 12 / 2010
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