How to Determine the Best Forex Strategy
Technical analysis aims to predict future prices based on past price movements. Therefore, how to make a forex trading strategy based on technical analysis will ignore other things outside of price movements, be it news or fundamental data, and have no effect on decisions made based on technical analysis, although in practice traders can combine technical analysis with fundamentals.
A forex trading strategy based on technical analysis will involve several steps, each of which is intended to clarify price movements, so that entry and exit level points can be determined. Here's how to determine the best forex strategy:
Set Trading Goals
The first method that a trader needs to do is to determine the trading objectives. If the trader's goal is to get income with a low time frame and quickly get profits, then traders use scalping and day trading techniques.
Meanwhile, if a trader wants to increase wealth or use forex as a future investment, then use trading techniques with medium to long term prospects, such as swing trading or position trading.
Choose the Strategy that Best Fits the Goals and Personal Trader
In general, trading strategies can be divided into two:
1. High win rate with low risk/reward ratio, or
2. Low win rate with high risk/reward ratio
The thing that needs to be done is to adjust the strategy according to the trader's abilities. If the trader wants a high win rate, low risk, then the trader can use swing trading. On the other hand, a position trading strategy can be used to obtain a low win rate and a high risk/reward ratio.
Calculate How Much Time Traders Can Spend Trading
If the trader has a lot of other work and the trader's time is not intense in front of the computer, you should not do scalping and intraday strategies. This technique is more suitable, namely swing trading or position trading. Because this technique does not make the trader have to see the full market movement.
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