Forex Trading Strategies

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Forex Trading Strategies
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1. Overview
2. Trading on the Technical
3. Trading on the Fundamentals
4. Trading When the Indicators Conflict
5. Trading Discipline

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Overview

• The idea of listing the strategies or trading
  guidelines is to create the equivalent of
  policies and procedures manual for trading.
• By defining your strategy before you enter into a
  trade that will help you to prevent emotion
  taking over your trading.

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Trading on the Technical

• Technical's refer to the use of charts and graphs
  to identify potential buy and sell levels.
• Traders who employ those tools are often called
  "chartists."
• An Introduction to Technical Analysis for more
  information on technical trading.

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Trading on the Fundamentals

• Trading on the fundamentals also referred to as
  trading the news is the study of news events and
  economic statistics to determine the trading
  opportunities.
• Referred as fundamentalists, these traders pay
  close attention to changes in the economic
  indicators such as interest rates, employment
  rates and inflation.

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Trading When the Indicators Conflict

• It is a fact of trading that there will be times
  when you will face conflicting information as you
  evaluate the likely the future direction for the
  particular currency.
• When faced with the contradictory information,
  you have two options

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• 1. Formulate the own opinion as to the direction
  the exchange rate will likely go.
• 2. Simply refrain from dealing in that currency
  pair until a clearer picture emerges.

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Trading Discipline

• The Successful trading needs the discipline to
  stick to a strategy.
• No matter the market direction, the worst thing
  you can do is act rashly, and without thought
  this only exaggerates losses.
• If you entered into a trade based on your best
  analysis available to you at the time and the
  trade still goes against you, it may be the best
  to cut your losses and move on.

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• While no trader likes taking a loss, just
  randomly buying and selling on every market
  change is not the trading strategy. It is a sure
  way to lose money.
• While we are on the subject of losing money,
  incorporating stop-losses into your orders can
  help protect your investment.