In the competitive and hard-hitting world of foreign exchange, the success of your trading decisions is largely governed by the trading strategy that you adopt. When you enter the forex trading systems, you have to build up an apposite trading strategy which has a potential to grow with time or you may suffer heavy losses.
It is a time consuming and lengthy process to formulate a sound forex trading strategy. You cannot device the right strategy in one attempt. It is with time as market goes through ups and downs and your skills as a trader matures, can you arrive at the best strategy.
There are some factors which you should consider while formulating a forex trading strategy:
1. Forex trading strategies are ever developing and growing with time hence it should never be taken as absolute. As the market trends change, adjustments are required to be made to the strategy, which itself is part of the forex trading strategy and this has to be done without refurbishing your strategy entirely.
2. You must choose the amount and the currency pairs that you want to trade in. Once you have decided on the currency pair, you must also decide whether you are going to be buying or selling.
3. You can commence a trade now as a market order or a limit order. As the name implies, trade is conducted at current market price in market order whereas in limit order trade can only be conducted when your predetermined price is reached.
4. It is always smart to establish limits to take profits or stop losses.
5. You should establish the scenario at which you would want to exit a forex trade. You should evaluate trade moves to determine whether you should continue or exit the system. If the trade move favors you, you could raise your stop-loss and take-profit limits. This way as long as the market is in your favor you continue to make money. If the market moves against your position, you can either take it as a point to exit the trade prior to the reaching of your stop-loss limit or stay in until the stop-loss or take profit limit puts a stop to the trade.

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