Keeping everything simple is a nice strategy in almost all types of activities. Sometimes, simplicity is the only way to become profitable in the Forex trading. Of course, not everyone likes to keep everything simple and not everyone should do that. But simplifying some basic aspects of the Forex trading will help you to avoid unnecessary problems and complications:
- Simple trading strategy can be as profitable as some really complex systems. By keeping your strategy simple you make it easier to follow and execute it. Adding complexity in the future can be your next level, but trading with a simple strategy is a very good way to start trading on Forex for real.
- Try to follow a simple money management system — trading with a fixed percentage of your account equity is easy and effective. Martingale system is not simple and leads to losses. So, with money management simple is almost always good.
- Fundamental analysis is a nice tool, but it is better to avoid reacting on all fundamental news you hear. Keep it simple — select only really important releases or indicators and monitor them when you trade.
- One of the best ways to simplify your Forex trading is to hold the open positions for a fixed amount of time. This way, your positions are limited not only with the
stop-lossand take-profitlevels, but also with the time limit. I prefer limiting them to 30, 60, 360 minutes and 1 week periods, depending on the particular strategy.
- Try not to trade on currency pairs with the base currency different from the one, in which your account is founded. For example, if you trade USD/JPY, while your account is founded in USD, your profit or loss cant be adequately measured, because it inversely depends on the USD/JPY rate.
- Look for a Forex broker with the fixed spreads, because trading with the variable spreads cant be easy. You cannot rely on your strategy, especially if it is a
short-termstrategy, if you do not know the spreads values for sure.
Some traders adore simple approaches to the market, while others hate everything that is easily understood by