Whether you are a beginner or a seasoned trader, choosing a forex trading strategy could determine whether you have a successful trading career or not. The strategy you choose should be one that suits your trading needs. Evaluate the amount of effort you are willing to put and the risks you are willing to take when trading.

The most common way to evaluate a potential strategy is by looking at its profits and losses. However, this does not provide sufficient reason for choosing any given strategy. Below are factors on how to choose a forex trading strategy that will work for you.

Time frame

When it comes to forex trading, there are different time frames in which you can trade. You should choose your trading strategy depending on the amount of time you have to spend trading. Timeframes influence the type of trading styles a trader can use. If you are a beginner, opening a forex demo account will give you a better understanding of timeframes and the trading style that will work for you. The three trading styles dependent on timeframes are:

• Swing trading
• Day trading
• Scalping

Swing trading is when daily and weekly charts are used by traders to place trades and keep them running until their target prices are reached. This is an efficient trading style as less time is spent on the chart. When it comes to day trading, hourly and four-hour time frames are used by traders to place trades daily. Traders run their trades for one day only and seek new opportunities daily. While is time-consuming, it provides more opportunities. Scalping is a trading style where traders use short time frames ranging from one to fifteen minutes.

Risk management

Managing risks is one of the most important things you can do as a forex trader. Proper risk management will make you a successful trader. Before settling on any strategy, make sure that it has a risk management plan in place to avoid major loses. When you are trading without a stop-loss safety tool, you are setting yourself up for failure.

Furthermore, make sure you are using this tool right, and not moving below the stop loss. To have a good risk management plan, know the amount of money you want to risk and the reason behind it. The right forex trading strategy for you is one that has good risk management, which allows you to tackle and understand the risk of trading.

The risk to reward ratio

Once you have established the risk you want to take, figure out the ratio of risk to reward for a particular strategy. Some forex trading strategies have win rates of up to 90 percent. However, this is useless to a trader if the risk to reward ratio is not good. Seek a trading strategy that has a decent or high reward ratio to ensure your losses are short and your wins are big.

Independence from indicators

To analyze the forex markets, most traders use technical indicators. However, these indicators are not always accurate and reliance on them could lead to some infrequent loses. When you are choosing a trading strategy, ensure that it does not rely on indicators alone for trading. If it does, you could be in trouble. The forex market is dependent on different factors and imperfect.

As such, no one indicator provides a 100 percent win rate. Indicators are only there to improve trade by efficiently showing historical data. A good forex trading strategy will help you understand why you should buy or sell at a certain position, instead of using indicators. This way, you will have a better understanding of the forex market.

Multiple setups

The majority of seasoned forex traders do not rely on single setups for trade placement. They use different structures in their strategies to guarantee success. If a strategy has one setup, you are likely to enter a trade too soon, without setup confirmation. Having minimal trade setups makes you enter the wrong trades and suffer loses. Having multiple setups means you will have access to more trades and opportunities. The forex market keeps changing and it is volatile. Choosing a strategy with multiple setups will help you deal with the imperfection and volatility in the market.