A Trading Strategy is a well-defined document that helps traders make buying and selling decisions based on a predefined set of rules. These rules need to be proven and clear.

A trading strategy with a complicated set of rules can only make your trading more complex. Priority should therefore be given to developing a clear trading strategy with proven trading techniques. Now, how do you know that your trading strategies have proven to be profitable?

Well, this is where back-testing comes in handy. Go through historical chart data and test whether or not your trading strategy is profitable. Discretionary trading strategies make it difficult for a beginner trader to trade consistently, therefore while back-testing makes sure to add strict set rules to buy and sell.

Tradingview provides a fantastic back-testing solution called Market Replay. I highly recommend back-test on Tradingview. Also, make sure that you record every trade that you back-test on a spreadsheet. Have a look at our spreadsheet below. Have you noticed something about the above data?

According to the test data listed above, we may conclude that this trading strategy has not proven to be profitable. As traders, what do we need to do in a situation like this? This is the trading secret. Now assume that you have a killer trading strategy that is clear and proven to be profitable. Next, you need to write down your trading strategy in your trading plan while clearly describing your rules of engagement. Therefore, Instead of fighting against emotions, you should learn how to control emotion ups and down when trading forex.

What if you can observe and identify when these emotions are messing up with you, you can easily control them, and you can trade with emotional stability, right? Simply put, you have to identify emotions at an early stage or in another perspective, I would tell that you have to identify and act before that emotion gets to a point where you have no control.

There you have it, this 5 step approach is one that any trader can apply to the most trading situation that causes trouble. Knowing the emotional trigger will help you stop the problem first.

Being able to change your thoughts and emotions can create your confidence in your ability to cope. In the early stage of my trading career, I did try news trading in many different ways, in many different timeframes. First one is news bring noice to chart. News can turn readable chart into an unreadable chart. Have a look at the chart below,. Have look at the highlighted period and news releases. Since news events create higher volatility price action behaviour, we as traders need to make a trading decision within a snap of a finger.

Not only that, but we also need to actively manage the trade as well. Sometimes news event never leaves a time to manage a trade. After getting a series of trade losses or a drawdown, Trading Journal lets you view your trading in an analytical manner that eventually helps you make sound and rational trading decisions by clearing your cloudy thinking.

The main goal of keeping a well-organized and clear trading journal is to prevent you from taking impulsive trading action, which will ultimately result in saving you in unnecessary losses and drawdowns. Using a spreadsheet. This is the best way to do it. One of the key benefits of using a spreadsheet is that it helps you to make different reports that offer a lot of useful details about your trading performance.

With that here is the Trade Details section where we enter all the data just after placing a trade. Through storing trade data in this way, you can easily review your past trades without putting a lot of Hussle into it. Another advantage is that you can visually display your trading results using various chart metrics. I think now you have the idea why a trading journal is such a valuable tool for any trader who wants to improve themselves as forex traders.

So, do you have a trading journal? Let me know in the comment section. Maybe I can help you to create a one. But, if we dig deeper, you should understand and, should be happy to get out of the market when the trade is no longer represent to be a profitable opportunity. Related — The Art of Cutting Your Losses Short — Forex Risk Management. Sadly, most traders, especially newbie forex traders, disregard the fact that how important it is to treat losers just like we treat profitable ones. However, on the other hand, successful traders, instead of ignoring losing trades like most traders do , they confront the possibility of being wrong, and therefore they know how to take a loss without hesitation on right time.

This is why it is so important to learn to love taking a loss. It sets you in an even better position to take on winning trades. Due to the high volatility, the Forex market is always changing. There are some months with strong and precise price actions while there some months where the price actions move sideways leaving unreadable price actions.

So as Forex traders, we cannot filter out which month is going to be profitable, all we can do is go through every month as normal and executing trading opportunities when it present according to the trade plan while prioritize on managing risk. Therefore stop getting frustrated after having a negative month. As long as you profitably complete the trading year, you can always compound your trading result and can grow your trading account into a big one.

Money management refers to the method of monitoring and planning the use of capital by an individual or a group. In personal and corporate finance, money management typically entails budgeting, spending, saving, and investing.

In trading, Money management is a strategy for increasing or decreasing the position size to limit risk while achieving the greatest growth possible from a trading account. Note how both definitions focus on the growth of the capital not the downside of the capital.

To protect your trading capital you can use the risk management, and money management is for geometrically growing your trading account. There totally different as the earth and the moon. The main object of good money management is to focus on one thing alone, and that is account performances. We recommend the fixed ratio money management method.

One of the core benefits of this method is that it gives you more control in drawdowns. As traders all we can do is, participating in the movements while controlling what we can control. Here are things what we can control,. Therefore, put your best focus to control what you can control.

The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This is hardly surprising given that forms of cash or currencies are being exchanged.

By definition, liquidity in stocks varies for a number of reasons. Stocks with low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to. In finance, the most liquid assets are always the most popular. A good example of this is the real estate or property market. While highly valuable, there are large disparities between the purchase price and selling price of property, as well as the time associated in making these transactions, and additional fees incurred by other parties.

Liquidity providers play a key role in this regard. Accounting liquidity is a measure by which either an individual or entity can meet their respective current financial obligations with the current liquid assets available to them.

This includes paying off debts, overhead, or any other fixed costs associated with a business. In the United States and other countries, companies and individuals have to reconcile accounting on a yearly basis. Accounting liquidity is an excellent measure that captures financial obligations due in a year. These measures are useful tools for not just the individual or company in focus but for others that are trying to ascertain current financial health.

If there is a large disparity between these figures, or much more assets than obligations, a company can be considered to have a strong depth of liquidity. This can be achieved using a total of four formulas: the current ratio, quick ratio, acid-test variation, and cash ratio. Highly liquid assets will correspond to higher numbers in this regard. Conversely, any number less than 1 indicates that current liquid assets are not enough to cover short-term obligations.

Unlike the current ratio, the quick ratio excludes current assets that are not as liquid as cash, cash equivalents, or other shorter-term investments. The acid-test ratio seeks to deduct inventory from current assets, serving as a traditionally broader measure that is more forgiving to individuals or entities.

In this sense, the cash ratio is the most precise of the other liquidity ratios, excluding accounts receivable, inventories, or other assets. In the financial services space, even large companies or profitable institutions can find themselves at liquidity risk due to unexpected events beyond their control.

Liquid markets benefit all market participants and make it easier to buy and sell securities, stocks, collectables, etc. Additionally, high liquidity promotes financial health in companies in the same way it does for individuals.

This metric is a commonly used as a measure in the investing, banking, or financial services space. Liquidity determines how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Of all assets, cash or money is the most liquid, meaning it is the easiest to utilize.

All other liquid assets must be able to be quickly and efficiently converted into cash. However, high liquidity is associated with lower risk, while a liquid stock is more likely to keep its value when being traded. Even though it can be profitable, only a few people make money in forex and those who do are usually those with experience and training. This means that you should take your time to learn about how the market operates before jumping into it with both feet.

If you don't want to lose your shirt while trying to make some cash, then avoid doing anything without learning from others first. For example: if someone offers you an opportunity where they promise guaranteed returns on their investment program but doesn't offer any details about what exactly this program entails or why it works so well, then run away as fast as possible!

Do not depend on forex to feed your family as it is risky. Forex is not a get-rich-quick scheme, it requires a lot of time and effort to master. I have seen many people lose all their savings in just a year or two, so please do not put too much money in this market and do not invest more than you can afford to lose.

Forex trading is a high-risk investment that shouldn't be used as an emergency fund or retirement fund because if something happens then you will lose all your money completely. The forex market is a complex ecosystem and it takes time to learn how to trade it.

There are so many things that you need to understand before entering this market and unfortunately, most people do not have the patience or the time to do this. This is why they fail miserably at trading forex. NOW READ: is cryptocurrency still a good investment in What other Emails are there besides Gmail? Thanks for subscribing! ABOUT US. Privacy policy. Terms and Conditions. The hidden truth about forex trading.

Join Our Telegram Group Chat - CLICK HERE. Hidden Signals FX-Strategy is a trend-following strategy based on two filters and a trend arrow. The first filter and most important is the MACD OSMA. The second filter is based on the ATR TMA price action filter that can to recalculates.

The entry arrow is a medium slow trend indicator that generates good signals; when it comes in late, the filters we propose manage to avoid many false entry signals, so this is a winning forex strategy designed for day trading but can be applied at all timeFrames. Buy arrow filtered by indicator MACD OSMA below the mt4 chart that crosses upward and the green line on the main chart. Sell arrow filtered by indicator MACD OSMA below the chart that crosses downward and the red color line on the main chart.

In conclusion, this is a clear, simple forex strategy, easy to execute that manages well to evade losses inside markets. The advantage of this forex strategy is that it generates a very low drow down.

The disadvantage is that the forex ATR TMA recalculates the indicator color, but the signals are medium slow, coinciding with an established market trend. Save my name, email, and website in this browser for the next time I comment. Attachment The maximum upload file size: 5 MB. You can upload: image , audio , video , document , spreadsheet , interactive , text , archive , other.

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The only secret that differentiates successful traders from losing traders traders who are always looking for trading secrets, shortcut and Get-Rich-Quick is the way they act and managing their trading activities. ABOUT US. This is why they fail miserably at trading forex. Well, this is where back-testing comes in handy. Using a spreadsheet. Goals provide guidance, something that aims while trading on the forex market and offers a sense of achievement every time a target is achieved.

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