Everybody knows that it is important to stick to a strategy when trading Forex . This post will not focus on a specific strategy, but rather give tips on how to adopt your strategy.

Guest Post by Yohay Elam of Forex Crunch - Forex Trading Blog

1. Simple Strategy: Your trading strategy shouldn't be too complicated. A complicated strategy will take too much energy to understand, adopt and especially analyze. Today's software enables lots of sophisticated mathematical tools. I'm not saying that you should avoid these tools. A triangular moving average may be the best indicator for you. Just don't throw it into the pot with 10 other calculations.

2. Research: After adopting a strategy, start checking it. The market's moves tend to repeat themselves. You can do a quick research on historical data and get a first idea if you're in the right direction or not. You can place your tools and immediately see the results - everything was in the past.

3. Testing: Now that you have an idea, start checking the strategy on the current market conditions. The best way to test a strategy is by using a forex demo account. This will allow you to test things in a calm manner, without risking real money.

4. Documenting: The most important part of this stage is the lessons you learn. It's very important to document your tests. Don't rely only on your notions. While getting a feel of some strategy is important, you should back up your conclusions with written results that you can refer to.

5. Tweaking: After testing and documenting a strategy, you may be pleased with it, but think that it needs small modifications. Maybe it will work better with 8 hour charts rather than 4 hour charts? Maybe the RSI period needs to be shorter? Maybe your strategy will work better for one of the crosses rather than for a major pair. These small tweaks might make a difference in the long term - making the strategy profitable.

After your'e pleased with your strategy, it's time for real trading. If you indeed have a winning strategy, stick with it. I'm sure you've heard that before. If not, go back to the drawing board until you find your winning horse.

Everybody knows that it is important to stick to a strategy when trading Forex . This post will not focus on a specific strategy, but rather give tips on how to adopt your strategy.

Guest Post by Yohay Elam of Forex Crunch - Forex Trading Blog

1. Simple Strategy: Your trading strategy shouldn't be too complicated. A complicated strategy will take too much energy to understand, adopt and especially analyze. Today's software enables lots of sophisticated mathematical tools. I'm not saying that you should avoid these tools. A triangular moving average may be the best indicator for you. Just don't throw it into the pot with 10 other calculations.

2. Research: After adopting a strategy, start checking it. The market's moves tend to repeat themselves. You can do a quick research on historical data and get a first idea if you're in the right direction or not. You can place your tools and immediately see the results - everything was in the past.

3. Testing: Now that you have an idea, start checking the strategy on the current market conditions. The best way to test a strategy is by using a forex demo account. This will allow you to test things in a calm manner, without risking real money.

4. Documenting: The most important part of this stage is the lessons you learn. It's very important to document your tests. Don't rely only on your notions. While getting a feel of some strategy is important, you should back up your conclusions with written results that you can refer to.

5. Tweaking: After testing and documenting a strategy, you may be pleased with it, but think that it needs small modifications. Maybe it will work better with 8 hour charts rather than 4 hour charts? Maybe the RSI period needs to be shorter? Maybe your strategy will work better for one of the crosses rather than for a major pair. These small tweaks might make a difference in the long term - making the strategy profitable.

After your'e pleased with your strategy, it's time for real trading. If you indeed have a winning strategy, stick with it. I'm sure you've heard that before. If not, go back to the drawing board until you find your winning horse.