How To Trade Forex

What’s The Best Way To Trade Forex?

If you came to this site looking for an answer to the question on the best way to trade forex, or best forex trading strategy – be not surprised that I get this all the time. In various social settings, all it takes is for someone to tell someone else that I’m Julian who has been trading for a living for the past 8 years, and I get questions like these…

“Hey Julian, What’s The Best Way To Trade Forex?”

“Hey Julian, What’s The Best Currency To Buy Right Now? What’s The Best Approach?”

“Should I buy or sell USD right now?”

Want A Short Answer to “What’s The Best Way To Trade Forex?”?

Best Way To Trade Forex

Seen some picture like this before? Actually, I wish I could give you a clear-cut, one-line “cookie-cutter” answer. Unfortunately, I’ll have to say it’s subjective, and highly so!

I hate to give such a short monotone-ed, non-committal reply, but in social settings, and given the circumstances, that’s pretty much all I can do.

Want something longer? Well, “it really depends” (another non-committal reply) – on market conditions, economic events, market volume – things which are quite interlinked with one another. You quickly see why I can’t really elaborate without breaking into a small-sized lecture with examples to show why different market conditions on different days would require very different approaches to trading it.

If you are new to this, I think you should look at this FREE 12 Min Trading Video I recently recorded. It’s actually a training of recognising market consolidation and breakout setups. Beyond recognising these setups, I didn’t really give much info as to how to trade it, but it’s not difficult to imagine, once you get an idea of what I’m talking about.

First Understand What Essential Price Patterns Constitute Everyday’s Forex Market

Watch this video more than once if you need.

Once done, you can now probably appreciate why I say that it depends.

  • I.e. Range-scalping or Swing-Trading depends of if the trading asset is in a range and how big the range is
  • I.e. Breakout trading depends of if the trading asset is even tightly consolidating in the first place.
  • I.e. Trend-riding first requires that a trend is confirmed to be in existence.

None of these mentioned approaches are superior to the other. In fact, how well you can understand this will determine if you can trade full-time or not.

How Far Are YOU From Being A Full-Time Forex Trader?

In my last sentence above, I implied that you can’t simply just “choose” to be a full-time forex trader. If you’re only good at trading trends, you’ll only be able to trade when the market is trending. If you’re only good at range trading or swing trading, you’ll only be able to trade when the market is going sideways in a medium to big way, etc.

What I really mean to say, is that there’s many of you out there that can only be at best a part-time forex trader. And there’s nothing wrong with that!

part time forex trader, full time ninja

I first started out being just a one-trick trader – this meant I only traded the markets ONE WAY, only when the markets permitted me to trade the way that I knew best.

Over time, I ran into extended periods of “stale market” – not actually that the markets were dead – but just that they were behaving in ways I was not familiar with. This permitted me the opportunity to hone my skill in trading different scenarios than I was initially capable of. Through the years, I’ve become capable at the various forms of market movement, although I have to say I’m most comfortable with Supply-Demand, and Trend-Riding approaches due to the low time-involvement. I can scalp if I wanted to, but baby-sitting trades is not something I enjoy or can do consistently given my commitments as a “House-Dad”.

If you would like to learn various ways to trade various market conditions in highly relevant LIVE case study scenarios via weekly webinars, I strongly urge you to become a member of my program called the “Forex Learning Group”. In each week’s webinar, I review the various tradable asset charts with my webinar attendees and suggest the best ways to trade them.

How To Trade Full-Time Without Mastering Various Methods of Trading?

However, did you know there is another way of trading full-time that doesn’t require that you become an expert of a few methods? This would be automated trading. Anyone with a broker MT4 installation can install a script known as an “Expert Advisor” (EA) to enable them to trade the markets automatically depending on certain criteria preset in the script. Then, your MT4 software will basically run as though it has your own personal concierge or personal assistant who scans the market for all the setups that are suitable and takes the appropriate preset action, and if it doesn’t, it stays put – non-stop, 24 hours 5 days a week!

Standby pit crew Renault

Picking different EAs, or shall we call it “operational scripts”, is like having a full teams of experts monitoring opportunities for different strategies for you – so that no matter how the market moves, you’re covered. Alternatively, you can also seek out a single ¬†EA that has a complex and complete system of operation that can trade the market for you like a swiss-army knife. Such an EA would be like the Binary Lab Hedging EA that I have developed. You can actually obtain your own copy of this, worth $499 for FREE when you open a Forex account of at least $1000 through The Forex Lab (US!). Check out details here!

If this all sounds good (it is!) Just take note there’s one more thing to consider. Running an EA on your MT4 also requires that your MT4 stays online all the time. You might realise that’s not always possible or practical because if all you have is a laptop, sometimes you could be on the move, or, maybe you could be doing something else, i.e. gaming, ¬†graphic editing, watching a 3D animation – that could require a vast amount of your CPU’s resources. You would then require something called a Virtual Private Server (VPS). Think of it as, if you had to hire a full-time 24hour security or sentry, you would have to have built them a guard post and rest area OUTSIDE your house. Why should they intrude on your personal space? Thankfully VPS is also quite cheap. Many brokers also offer free VPS if you commit to trading a certain volume a month. Or you can also buy Forex VPS ala carte with this vendor for just about $15 a month.

How To Have Your Own Computerised “Trading Team” Work For You, Even Without a VPS?

There is actually ANOTHER easier way. And this could be the better way for those who either don’t want to have manage monthly VPS payments, setup your broker MT4 on a VPS, and then do your EA settings, checking that your VPS is online weekly, and tweak them on a regular basis. Honestly, it’s not much, but some just don’t enjoy doing these admin works. The answer and solution lies in something called PAMM. PAMM stands for Percentage Allocation Money Management.

In short, what this really means is “Trade Copy”, or “Copy Trading”.

Students Copying Work in Class During Test Comic

However, PAMM is more than just copy-trading. It doesn’t simply use a software script to replicate trades from a master account onto receiving accounts. Trade copy softwares typically work in such as manner as Master Account > Signal Service Server > Receiving “Slave” Accounts. There will definitely be lag times across the signal server, and also on the execution side of the slave accounts. These lags can be costly – especially in periods of high volatility! I speak from experience! Not just me, you can go through forums and easily find scores of people who complain why the master account does well while they struggle to be profitable. Lag, or “Latency” is the reason.

What I like about PAMM, is that the trade “copying” is done at the broker level. The slave accounts that follow the master account will receive the EXACT trade asset trades at the EXACT price, EXACT time, and the EXACT proportion! This is the truest form of trade copying.

You can learn more about of PAMM on my PAMM page. You can get started with my PAMM by sending a message to my FB admin HERE. You can let them know your starting budget (starts from as low as $100), and my admin will tell you which broker to set up with.

Final Words

At the end of the day, the best way to trade forex varies based on market, and also – YOU. It’s about what you’re comfortable with, what amount of time you can afford, what sort of risk exposure you are comfortable with. Only based on what you are comfortable to do, you can come up with a trading plan where you could either have a part-time or full-time involvement, which could comprise only of manual trading, a combination of automated trading and manual trading, or purely automated trading alone! Only you can decide that.

You’re certainly welcome to hit me up for help or advice on this via the comments below, or a private message to my FB page!

Good trading,

Julian

 

 

 

About the author

Julian Wong

Dad of 3 Kids. Son of floor-traders/broker parents. Born with ADHD and Aspergers which makes me "emotionally retarded" (according to my wife), but that also gives me special abilities in pattern recognition. Been involved in financial derivatives since 16. Enjoys playing tennis. Sings like Josh Groban. Aspiring to DJ in large music festivals.

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