• Simplicity
Simplicity is perhaps the most important factor that determines whether or not a forex trading strategy is worth pursuing or not. The reason why is because the particular forex trading strategy you use is a very minimal part of making consistent money in the forex market, so using complicated trading strategies is just a waste of time and they bring no real advantage over simple trading strategies. The most important aspects of successful forex trading are sound money management and developing and maintaining the correct forex trading mindset. So, if you use overly complicated trading strategies based on numerous lagging indicators or expensive trading software, you are simply going to make your trading experience extremely frustrating and difficult because most of your mental energy will be focused on your trading strategy instead of remaining objective and practicing effective money management.
This trap of believing that complicated forex trading strategies or systems are necessary to succeed in the forex market is a very easy one to fall into. It is because there is so much information on the internet about trading strategies and systems that so many traders put most of their focus and concentration on them and think so little about trading psychology and money management, this is also one of the reasons why most traders fail to make money consistently. The traders that end up figuring out how to make money consistently are the ones who figure out that they must obtain the proper thinking patterns and money management techniques in order to make consistent money in the forex market. So, since complicated trading strategies only take away from focusing our mental energy on money management and achieving the proper trading mindset, it only goes to reason that simple forex trading strategies are much more conducive to successful forex trading.
• Effectiveness
Unfortunately, it is not enough that a particular forex trading strategy is just simple to understand and implement, it must actually be an effective strategy that many traders have used to profit from consistently for years. There are so many effective and simple forex trading strategies out there right now being taught by professional traders, that trying to “reinvent” the trading wheel is simply an inefficient use of your time and money. The best way to learn an effective forex trading strategy is from a professional forex trader who teaches the same effective forex trading techniques that they use.
Generally speaking, trading techniques based on classic technical analysis methods can be very effective trading strategies. When you learn to trade forex you should aim to learn these types of methods, some of which include things like, simple support and resistance trading, price action candlestick analysis, the power of trading higher time frames, classic technical price patterns, retracements, breakouts, and other similar “core” technical analysis tools. There is a reason why these methods have been around for hundreds of years; because they are simple to use and to understand, and because they work.
Proceed to Chapter 4: Other essential forex trading information