Forex - AlexNights

Forex Strategy Trading Deliberations
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Forex Strategy Trading deliberations out of neccesity must foremost center around one requirement: capital preservation. Only if a Forex strategy is able to preserve capital, you are going to stay in the game. Only then you stand a chance of acquiring those profits other traders boast about. Stay in the game for more than, say, one year, and you'll have learned so much, that eventual succes is just around the corner.
There is more than one way to skin a cat. The one resource that did more than anything else to keep me in the game are the books written by Van K. Tharp. His writings made me aware of what opportunity, chance and expectancy mean in a trading context. Especially "Trade Your Way To Financial Freedom" struck a chord with me.

Van also tought me, that - as long as position sizing, money management and risk control are in place and working - the timing of a market entry actually becomes less important. To put it more dramatically: if these risk control measures are in place, the system should be able to preserve capital, even with randomly timed entries! Would you have believed that? Grab one of his textbooks, you will not be disappointed!

Forex Currency Trading
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Currency trading on the Forex spot market always involves trading a currency pair. When you open a position, you purchase one of the currencies in the currency pair and pay for it with the other. So you actually need one currency to be able to purchase the other one. Closing a position is nothing more than reversing the process. If the currency pair's exchange rate has changed between open en closing a position, you made a gain or a loss, depending on how the exchange rate change has developed. It's important to realize that you're not really shorting the market - at least not like you could with equity and futures. For every short position, there exists a corresponding long position in the other currency. Only if exchange rates change, you stand a chance of making money.

Forex Trading Signal
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Forex trading signal generation, i.e. determining Forex market entries and exits, is not the most import part of you system.
Much more important is risk control, money management, position sizing and as a derivative of these topics stop strategy as well. Remember: your first priority is to preserve capital in order to stay in the game.
If you have all of these in place, and only then, it's time to devote attention to improving your system by focussing on your Forex trading signal generation.
With a system that preserves capital to start with, generating better Forex trading signals will do wonders for your bottom line.