Choosing a Forex Trading Plan
There is no way to determine the best strategy, and be sure to know that there is no such thing as a perfect strategy or plan. There are options available to you, but there are a few things to keep in mind before deciding.
Putting together a personalised strategy
It’s the preferred method and philosophy at Inspire To Trade, but keep in mind that it requires the most work. Planning your Forex strategy requires hours of screen time and research.
Pro: You can choose a style that works best with your strengths. Fundamental vs Technical trading is an age-old debate, but each has its charm. Use personality strengths and interests to put together the best strategy for you.
Con: It takes quite a bit of time and dedication before you get to the actual trading part. You need to learn, read and study the markets and their movements. Once you have a trading plan you will test and tweak it before you become profitable.
Learning the rules of an existing strategy
If you are looking to buy and copy a proven strategy, rest assured that you have many options. You should read up on the type of strategy or join a trading community to teach and mentor you in a specific trading style.
Pro: A time saver in terms of research and time screen. This option also offers you resources to help you understand, implement and trade.
Con: Trading strategies are not one size fit all. Though a strategy appears easy on paper, it does not mean that it will suit your lifestyle and strengths. You risk losing money before finding the perfect fit for you.
Using an EA (Expert Advisor)
You have the option to pay for an automated trader that uses algorithms to read the charts and place trades based on trading rules. You can buy into a platform that copies the trade of a professional. Your profits paid into your account.
Pro: You do not need to spend any screen time before trading. You can read up on the best option for you and start trading immediately.
Con: You do not know when and why you are losing trades. Also, keep in mind that this is the most expensive option of the lot. You will either pay a large once-off fee or subscribe to a monthly fee. Also, keep in mind that profit share is a possibility.
Your motivation and trading goals
Things to keep in mind when deciding
- Regardless of the method that you choose, you will invest in time and effort to trade. The amount of time that you can spare will determine the type of trader that you can be.
- Some strategies need large sums of money to be successful, but there are strategies that you can get away with a few dollars. Be sure to check up on this before wasting your time with a strategy that you can maintain.
Skills and personality
- Your interests and personality is an important factor in your trading. If you are analytical then you should consider a technical strategy. If you prefer news and current events, then perhaps you should look at a fundamentally driven strategy and trade plan.
The list can go on and on, but it all boils down to you. There is money to be made on the markets; it is up to you to get it!