There are many attributes that make a great forex trader or any trader of the financial markets for that matter. Profitable traders know that trading must be done without emotion and with an elegant, simple, and adaptable strategy if they are to be successful over the long term.
One aspect of a successful trader that many overlook completely is the simplicity of the trading strategy that is being used. It is my opinion that the simpler the trading strategy, the easier it is to gain proficiency and expertise with that strategy. Continued perfect practice of a simple strategy will drive a novice's expertise, and they will then be able to modify their strategy and mindset to create sizable monetary gains.
Having gone through the many forex trading blogs, websites, and forums, it is not hard to pick out a massive number of very complex and hard to comprehend strategies and indicators that most certainly would baffle a novice. Complexities like these offer no help to the beginning trader. As Einstein thought, "Concepts should be formulated in their simplest form, but no simpler." To me, this has always meant, "Develop an idea so that it is understandable, but without leaving out details that would make the idea incomplete."
I would give this bit of advice to aspiring or novice traders. Toss out all of the forex auto trading robots and secret black box indicators and focus your efforts on learning a basic forex strategy that has proven over time to be profitable. Once your perfect your trading approach, consider adding complexities if you can prove they help your profitability. I think you will find, though, that as you master your forex strategy, you will be subtracting ideas from your strategy rather than adding to it. Why would you do this? Once you find something that builds your account steadily, there is no reason to add to or change you methods.
There is a very easy way to test the simplicity of your forex strategy. Let a beginner look at your charts and then ask them to explain to you how the strategy works and how it can be successful. If they can grasp the general concepts of your strategy within a few minutes (entries, exits, etc), then you have a strategy that will allow you to be profitable in the financial markets for years to come.
How does one identify a simple forex strategy? Let's start with sticking with methods that have very distinct and easy to learn rules. A rule based strategy is simply a strategy that is executed based on a few simple rules.
Example: If price hits a recent resistance level, we execute a short trade. We will place our stop 20 pips below the round number. As price hits the first round number will close our trade. If price is not at least 20 pips away from our support (take profit level), we pass on the trade.
For illustration purposes, let's assume that this strategy has been profitable for many years and now we are going to use it to trade our way to financial freedom. Next, our challenge is to conquer the emotional or psychological aspects of forex trading by trading the strategy without any emotion whatsoever. All great traders are meticulous record keepers and we will practice this as well, setting the stage for future data analysis. Now that we are making money consistently with the strategy and trading without stress, it is time to increase our trading size so we can start earning a living.
You have practiced with precision, without emotion, and you have meticulously written down your trades. Let's increase our trading size now and begin to seriously go after some significant returns. You may be wondering; what time period should I expect this to happen in? For some with financial industry experience, this may take only a few weeks if their trading psychology is beyond reproach. For those with no experience with trading financial instruments, this may take weeks, months, or even years. But don't get discouraged, trading is a skill that, once learned, can provide you with a profitable and rewarding career for life.
Let's review:
Chose a forex trading strategy that is easy to comprehend and easy to execute.
Ensure your chosen strategy has only a few basic rules to follow.
After you comprehend how you will be making money with the strategy, practice the method perfectly until you can trade without fear.
Record your results so you can prove to yourself that you can trade without emotion and are consistently profitable.
Now that you are building your account without stress or emotion, you can increase your risk and the dollars you are trading.
Simplify your strategy, build your skills, repeat and grow as a trader!
Forex trading should not be (but can be) an over complex adventure. Big Brain Forex is your source for a simple and elegant trading strategy that can be used to make strong consistent gains in the forex market.
Simplicity in concept, ease of execution and commitment to your consistent profitability make Big Brain Forex a unique and honest proposition in a industry that is replete with charlatans.