Why You Should Believe In Your Own Forex Strategy

Sun, Oct 14, 2012

Investment

It’s very tempting, especially when you first start out, to blindly follow what other people do when they’re trading forex, CFDs or spread betting. This is not how you should go about trading. While it’s always good to get some advice, this is your money and your investment, and copying other people is just like giving them responsibility for your money.

One of the most important things to remember when you’re looking at sites and forums, listening to what people have to say, is that you can’t really trust them. People are especially prone to exaggeration when they’re talking on the internet, often making their tips seem a lot better than they really are. Don’t trust screenshots of supposed profits; they are far too easily doctored. If you’re not careful, you could even be unlucky enough to follow completely false advice that someone knows will result in a loss. There are people out there who get a kick out of giving people negative ‘advice’. There are others who attempt to influence prices through doing this.

You should also realise that it’s rare that you’ll find a trader who’s in exactly the same positions as you. What might seem great to them, is not necessarily ideal for you. This is especially true when it comes to the amount of investment you’re using. Things don’t necessarily scale up or down like you’d expect.

One of the primary features of trading forex is that you develop your own strategy. All of the best traders do. This is how you become successful; working out what works for you, what doesn’t, and how to go about doing it. By all means, take general tips and guidance from what you find on the internet, but take things with a pinch of salt. If you spend ages looking for other people’s ideas that fit into your own strategy, you could be wasting your time. It would be far better doing actual research into the market in order to improve your strategy.

There is a certain degree of trial and error in forex. It may seem at first that your strategy isn’t working, but as long as you are being responsible with what you trade, and have reasons for making decisions, you are learning. This is of course very important. It may take you far longer to hone your strategy through copying others, than working it out on your own.

There are those out there who will reveal their complete strategy, often for a fee. It’s incredibly hard to tell what is and isn’t a scam, but it’s always worth considering why they’re revealing their strategy. Surely nobody has a good reason to tell you how they’re making their money for free?

In short, trust yourself. If you’re being careful, not making more losses than you can afford, and are following your signals, then it’s likely you’re on the right track. Like lots of things, forex is a marathon, not a sprint.

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