Forex Trading - The Critical Two Elements ALL Successful Traders Need

Forex Trading - The Critical Two Elements ALL Successful Traders Need

by Kelly Price

There are two elements to a successful Forex trading strategy but most traders fail to understand how the two elements combine to make a profitable Forex trading strategy. Most traders don't understand the link and lose...

The first element you need and you probably guessed - you need a robust, simple, forex trading system based on sound logic - most traders however cannot even get this right and make these critical errors.

1. Use a Forex Robot that's Been Back Tested

They then think this should work in real time and of course it doesn't. If you have all the data and bend the track record to fit you get profit in hindsight - but going forward no two data segments repeat exactly the same and the system collapses in real time. Most traders follow these automatic trading systems and all the ones with simulations destroy equity.

2. Day Trading and Scalping Strategy

The logic of doing this form of trading is dumb - all volatility in short term time frames is random, so you can never win.

3. Predictive Mathematics

Predicting is hoping and guessing and you won't win at Forex doing that. Also markets don't move to a mathematical formula, only the odds - so a complicated theory can be very clever but the market won't respect it, as it doesn't move to maths - period.

To win your strategy should be simple. Simple Forex trading systems work best as they are more robust in the brutal world of trading and you should always trade the reality of price change and not try and predict.

Now the next element is the hard part.

The Keys of Confidence and Discipline

You need the discipline to apply your method through periods of losses, stay on track with your trading signals until you hit a home run - it's not easy, here's why:

Many people online claim that you will suffer little or no drawdown periods and they don't last long - rubbish! Even the best traders in the world suffer weeks or months of losing periods, sure they win longer term - but these periods happen to them and they will happen to you.

When they do, you need to trade through them as the market wrong foots you and hands you losses and its hard to do for most traders.

You need to have confidence in what you are doing and this will be transmitted into discipline. You will never have discipline, if you don't have confidence and that is why you need to know what you're doing, even if you are following someone else's trading system.

Get the right forex education, get a simple, robust, logical method, learn it and have confidence in it. You will then have the discipline to win and enjoy currency trading success.