| If you have tested or do real trading for some times, | | | | holds by certain persons who have high influence in |
| you must realize that there are many forex trading | | | | the state of economy. For example, a meeting about |
| strategies that can be applied. Every strategy has | | | | deciding a new interest rate or inflation will have |
| different pros and cons, need different circumstance | | | | great impact in the currency values. Usually it will be |
| and data, and will works well in certain currency pair. | | | | already too late to enter the market when the result |
| Basically, forex trading strategies can be divided into | | | | has been announced, so you have to use the current |
| two major: | | | | data to analyze and guess the result before. |
| 1. Technical analysis | | | | Not only short term trading, fundamental analysis can |
| This strategy relies heavily on data, mainly charts | | | | also be used as a long term forex trading strategies. |
| from previous market movements to forecast the | | | | This is rather complex, but basically you predict the |
| future direction of prices. There are various methods | | | | future trends of the market based on how the new |
| to read this data such as candlestick charting or Elliot | | | | policy will affect the market in long run. |
| wave, but basically they search for patterns in the | | | | There are also other methods in forex trading |
| chart for a given time and looking for relationships | | | | strategies aside from technical and fundamental |
| between various indicators such as price and volume. | | | | analysis such as Scalping. |
| This strategy is preferred by most traders and they | | | | Scalping |
| use it in daily basis to decide the best transaction | | | | Scalping is about making small amount of profits from |
| available currently. Usually, each trader has their own | | | | time to time where it will reach significant amount |
| way to interpret the data by using various variables | | | | when combined. It requires the trader to spend most |
| and designed specifically for a particular market he is | | | | of his time watching his open positions, but it can be |
| in. These difference in methods make them have | | | | easier by using automated trading software. For |
| different winning rates even though they can access | | | | instance: When a scalper notice a small movement in |
| the same data; the trader with a better method will | | | | the market that has profit potential, he will takes this |
| get more profits. | | | | chances even if it only get him 5 pips in profit. |
| 2. Fundamental analysis | | | | Not all traders can do scalping since it demands |
| This strategy is executed by analyzing various | | | | patience, quick decisions, and no emotion involved. A |
| economy factors like interest rate, production, | | | | scalper will execute his strategy with strict discipline |
| payroll, management, and overall state of economy | | | | even if he notice opportunity to get more; he will |
| to make entry and exit decisions. For example: some | | | | make an exit as planned, gain small profit, and move |
| news such as Non Farm Payroll or Wholesale | | | | to the next order. |
| Inventories can affect the market greatly. If you can | | | | If you are still unfamiliar with forex and looking for a |
| analyze the market movement before the news out, | | | | suitable forex trading strategies then I suggest |
| you can secure your position and wait for the profit. | | | | learning technical analysis first, it is the basic of almost |
| On some occasions, there are important meeting | | | | all strategies. |