The Forex Trading process

June 15th, 2008 expert Posted in FOREX TRADING STRATEGIES and CONCEPTS |

Many online Forex Traders think that forex trading is all about geting the direction of a trade right.

To enter a successful forex deal it is likely that a trader will have gone through the following processes to arrive at the strategy to be applied to the particular deal:-

They will have developed a trading strategy that evaluates the trading environment, has a method of scanning the market for potential transactions, has trigger and signal required to enter a transaction, has decided how the transaction will be managed, has a predetermined way of exiting the transaction and a record keeping process.

Before this they will have developed their dealing station skills (entering orders, stops, targets etc) and Charting skills. They will have determined the timespan they trade in and risk they are prepared to adopt on every trade. They will have backtaded, demo trades and tested a number of strategies to reach the one that they are comfortable.

They will be aware of most of the technical analysis tools and indicators and a number of trading setups. they will know the difference between a signal and a trigger. They will know what kind of target to go for on their trades.

The diagram below summarises this process and creates a framework for the notes that will be available through the Forex Trade of the Day process and Expert-4x notes.