You may have heard the adage, “if you fail to plan, you plan to fail.” This is particularly true in Forex speculation.
Successful traders start with a sound strategy and they stick to it at all times.
- Choose the currency pairs that are right for you.
Some currency pairs are volatile and move a lot intra-day. Some currency pairs are steady and make slow moves over longer time periods. Based on your risk parameters, decide which currency pairs are best suited to your trading strategy.
- Decide how long you plan to stay in a position.
Based on your currency pair selection, plan how long you want to hold your positions: minutes, hours, or days. Remember that depending on your account type, having open positions at 5:00pm Eastern Time may incur rollover charges.
- Set your targets for the position.
Before you take a position you should establish your exit strategy. If the position is a winner, at what rate will you cash out? If the position is a loser, at what rate will you cut your losses? Then, place your stops and limits accordingly