Profitable Forex Trading - Why You Should Create Multiple Strategies
James Woolley
December 07, 2009
If you have ever tried to create your own forex trading strategy, you will know just how difficult it is. It's very easy to construct a simple trading system, but the difficult part is trying to come up with a strategy that generates consistent profits. Nevertheless with a little bit of experience it does become easier, and over time you should hopefully be able to come up with several different trading strategies.
Of course you basically only need to come up with a single strategy in order to make money from forex trading. However my own view is that it's often a good idea to continually test out new trading methods, because you will often find that your main strategy may start losing money if market conditions change.
Furthermore it's also a good idea to have different strategies for different time frames. For example you may have a profitable strategy that only trades positions on the daily or the weekly charts. There's nothing wrong with that at all except that you may sometimes have to wait for days (or weeks) on end for a decent set-up to occur. Therefore if this scenario rings true it may be worth trying to develop a short-term trading method that you can use during these quiet periods.
I ended up doing this myself because I soon found that despite the fact that my main 4 hour trading method made some decent profits overall, there were plenty of quiet periods where I was left twiddling my thumbs. As a result I started to develop some trading methods that I could use on the intraday time frames. These strategies not only enabled me to make some extra money, but they also helped to alleviate the boredom which often occurs when you are patiently waiting for a set-up on the longer time frames.
So the point I want to make is that it is often worth creating multiple trading methods that you can use on the different time frames. Although you may be a skilled short-term or long-term trader, it is always worth applying some of your skills to the other time frames as well because there are some decent profits to be made.
The truth is that are opportunities to make money on all of the different time frames whether it's the 5 minute or daily chart, for instance. Whichever chart you look at you will find that there are plenty of breakouts that you can trade as well as opportunities to trade with the overall trend.
Obviously its difficult to come with several winning systems but if you do manage to achieve this goal, then you be greatly rewarded with much greater profits (and you will of course alleviate much of the boredom that occurs during the quiet periods). I know this to be true because at the present time I now have a whole portfolio of different forex trading strategies that I use to trade both the short-term charts and the long-term charts.
Click here for more information about a forex course that will teach you all the basics of forex trading, and to read a full review of Forex Nitty Gritty.
Of course you basically only need to come up with a single strategy in order to make money from forex trading. However my own view is that it's often a good idea to continually test out new trading methods, because you will often find that your main strategy may start losing money if market conditions change.
Furthermore it's also a good idea to have different strategies for different time frames. For example you may have a profitable strategy that only trades positions on the daily or the weekly charts. There's nothing wrong with that at all except that you may sometimes have to wait for days (or weeks) on end for a decent set-up to occur. Therefore if this scenario rings true it may be worth trying to develop a short-term trading method that you can use during these quiet periods.
I ended up doing this myself because I soon found that despite the fact that my main 4 hour trading method made some decent profits overall, there were plenty of quiet periods where I was left twiddling my thumbs. As a result I started to develop some trading methods that I could use on the intraday time frames. These strategies not only enabled me to make some extra money, but they also helped to alleviate the boredom which often occurs when you are patiently waiting for a set-up on the longer time frames.
So the point I want to make is that it is often worth creating multiple trading methods that you can use on the different time frames. Although you may be a skilled short-term or long-term trader, it is always worth applying some of your skills to the other time frames as well because there are some decent profits to be made.
The truth is that are opportunities to make money on all of the different time frames whether it's the 5 minute or daily chart, for instance. Whichever chart you look at you will find that there are plenty of breakouts that you can trade as well as opportunities to trade with the overall trend.
Obviously its difficult to come with several winning systems but if you do manage to achieve this goal, then you be greatly rewarded with much greater profits (and you will of course alleviate much of the boredom that occurs during the quiet periods). I know this to be true because at the present time I now have a whole portfolio of different forex trading strategies that I use to trade both the short-term charts and the long-term charts.
Click here for more information about a forex course that will teach you all the basics of forex trading, and to read a full review of Forex Nitty Gritty.
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