Forex trading method is a sequence of rules that forex traders must follow when making decisions to open or close a position. These rules are based on technical analysis and have been shown to be reliable when testing its repeatability rate throughout history. A clear trading method will help you free yourself from the momentary emotions in the decision-making process. When an investor wants to open a trading position, he will start to suspect and ask questions, things that can greatly affect his thinking:

• Did I miss anything during the analysis?

• Is my decision to sell (or buy) the right one?

• Is this a good time to enter the market or should I wait a little longer?

• Am I taking a risk?

All of these doubts will strongly impact the investor and affect his forex trading results. Joining the market too early or too late or missing a profitable trade is often a mistake in trading. If the investor does not have a strategy, he cannot be sure that his long-term trading process will be successful and profitable because the losses may exceed profits. Understanding the current situation of the market by using the techniques, principles, indices, etc. when opening a new position is the most important thing.

It is essential for each investor to choose a specific time frame (long term or short term) when developing a trading strategy. The amount of money in the account and the general management principles set the necessary limits for that strategy. A longer time frame will make the signs less false. Technical analysis applied with daily and weekly charts is usually more accurate. These charts are usually preferred but require large stop losses, so you need to have large initial capital or only trade small amounts to avoid risk. Technical analysis that applies shorter time frames often causes a lot of market turbulence and therefore results in more false signals. In this case, you should use small stop loss levels, but so the probability of errors is still high. All these issues should be considered and taken into account when making a decision to choose a specific trading strategy.

Money Management is an important factor when developing your trading strategy. Think carefully and answer this question: "What part of your capital will any trade make?" The usual average is 1/10 or 1/5 of the extra initial capital. Depending on the investor's personality and the specific characteristics of the trading method. The second important question is: "What is your method of limiting your losses and how big can your stop loss be?" You should limit your losses on each trade to 3-5% of your capital. .

The notion that your risk is lowest when your minimum stop loss is completely wrong. Small stop losses are often triggered after a random price movement and lead to unnecessary losses. The stop loss is determined by the price movement and the time frame of your forex trade. It is better to determine the size of your stop loss levels and the amount of capital used in each trade as soon as you build your strategies and strictly follow them.

The task of a trading method is to point out times in and out of the market. A trading signal is formed by certain market conditions based on indices, chart analysis, etc. The stop sign is usually based on profit maximization and the use of Stop Loss. (Trailing Stops) is included in the MetaTrader4 trading platform.

There are many different trading methods. Basically, they are divided into trend-based trading methods (following a market trend) and amplitude-based trading methods (applied in stabilizing markets) by market conditions. Different schools often require different trading strategies. Often the trend trading method shows signs of market entry right at the start of a new trend, so it usually goes on for a long time and brings big profits. If you apply the margin trading method, choosing the best time to enter and exit the market is the most important thing. Most of the trading methods that many forex investors follow follow a market trend.

No matter what your forex trading method, you must always test them on the specific market you want to apply. Building an effective trading method is a long process of testing in the market, but the reward for that is huge. A successful trading method will give you the confidence that the long-term results will be good and bring you much profit. Successful investors know very well that it is far better to execute many profitable low risk trades much better than one high profit but high risk trade.

Here are some articles about trading methods that I have posted before. Hope to help you in the upcoming forex trading process.

Forex trading tactics using the Price Action method

Forex trading methods using trend and Moving Avarage

Forex trading method uses Bollinger Band and trend

Breakout trading method in forex

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