October 1, 2013

Create Forex Strategies from Nothing

Creating Forex Strategies

There are a lot of traders who look at creating their own forex strategies.  Some of these traders will look at using a normal strategy and then changing it to suit them.  However, there are other trades who look at creating their forex strategies from nothing.  These traders generally have their work cut out for them as there are a lot of different factors that they have to consider.  When you do this you need to consider what type of strategy you are creating, what you are going to look for, the analysis that you will use, the time frame you work in and the risks that are involved.

The Type of Forex Strategies You Are Creating

The first point you have to look at when you create a forex strategy from nothing is the type of strategy you are creating.  You can create a trend or a range strategy.  These are the two conditions that the market goes through and you have to determine which market you are going to work in.  It is possible to create a strategy that works in both markets, but this is extremely hard and the risks of doing this are often considered to be too great.

What You Are Looking For

When you are looking for with the forex strategies will be linked to the type of strategy that you are creating.  If you are creating a trend strategy then you need to look at what sort of trend you are looking at.  Will you be looking for a trend that is very strong or mildly strong?  If you are working with a range strategy then you have to consider how tight the range you are looking at need to be.  The basis of your strategy is going to be formed at this point.

This point is also when you are going to consider the theory that your strategy is working off.  All forex strategies will have a theory that lies at their base and you need to determine what you are looking at.

The Analysis You Complete

The analysis that you are going to be using is directly linked to what you are looking for.  This is due to the analysis giving you the signals that tell you that you have found what you are looking for.  At this point you have to consider whether you are going to use technical or fundamental analysis.  You will also need to determine what tools you are going to be using.  With technical analysis you have to consider the indicators and with fundamental analysis the news.

The Timeframe

The timeframe that you are using will relate to the analysis and what you are looking for.  There are many traders who feel that you need to consider the timeframe you are working in before you consider anything else.

The Risks of Trading

There are a lot of risks that come with trading.  There are also a lot of risks that come with the trading you do with certain strategies.  You need to consider what the risks are going to be with the strategy that you are creating.



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