On the internet one sometimes finds Forex tips. What are Forex tips? Our belief is that Forex tips are little bits of someone else’s Forex strategy from their Forex trading. The world of Forex trading is a fairly transparent place so it is not as though someone has privileged information. Rather, someone else has done their Forex trading homework and has a Forex strategy. Our suggestion is that you forgo Forex tips from others and develop your own Forex strategy.
One of the problems with tips, whether for stocks or Forex trading, is that they are only useful for a short time and that short time may have expired by the time you get the tip. Someone’s Forex tips derive from their homework and their development of a Forex strategy. When market volume is such and such and when the news is such and such then a given set of indicators can be read in a given way. This distills down to concrete Forex tips to trade a given currency pair within a given range for the day. However, if all of the big traders know this, then Forex trading for the day will move out of the given range and following the Forex tip will only lose you money.
Forex tips are often an accurate subset of someone’s successful Forex strategy. A better thing to do with Forex tips is to study them. Come to understand the Forex strategy behind the Forex tips you see. Then incorporate the Forex tips, or their rationale, into your own Forex strategy. Then you will find that the Forex tips you read are in line with your own Forex strategy and your own Forex trading. However, you will be doing your Forex trading in line with your Forex strategy at the right time and not when the market has moved beyond the narrow confines of another’s Forex tip.
Another use of Forex tips is as a learning tool. When you see Forex tips or when you find yourself giving someone else Forex tips, follow up and see if the Forex tips worked and for how long in active Forex trading. In auditing your trading results there are process audits and results audits. In a process audit you look back to see if you followed your own Forex strategy in your Forex trading. In a results audit you look back to see where you were successful in Forex trading and where you were not. If you diverged from your Forex strategy it will show up in your process audit. If your Forex strategy is at fault it will show up in your results audit.
Follow Forex tips the same way. Do simulation trading using Forex tips and see if they work. Then you can file them under “mistakes I did not make” or add them to your own Forex strategy.
Our Forex tip for the day is that you should be continually auditing your Forex trading results and your Forex strategy. Our hope for the day is that your Forex trading becomes more and more successful.
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