All information about forex system, forex strategy, forex demo and others

If you want to be successful trader you must have a solid trading strategy in place. A forex strategy is a set of trading rules to follow while trading in the forex market. Following one strategy will not work always instead you need to experiment with multiple strategies.

Developing a strategy of your own is not as complicated as you might think. You need to simply refer your set of indicators and stick to them finding patterns within those indicators. You can determine patterns by learning to study the charts.

Most of the strategies are based on bars. A bar is the time value on the charts. They usually represent 30 minutes of trading between particular currencies. 15 minute, 60 minute, 4 hour, and 1 day charts are also followed by experts to develop strategies. But try to refrain 5 minute time frames as it is too small and is not reliable to indicate clear patterns or signals.

Your golden rule for successful trading is: If the previous three bars in chart are below the Bollinger, then sell. Bollinger bands are preferred by many experts as they are based on standard deviations. You could literally make number of strategies just based on Bollinger Bands.  

While developing your strategy you should think about global criteria of filters for catching signals. You filters could be volatility based or indicator based or day based. Each strategy should have several filters and users should be healthy to adjust those filters according to the situations while implementing the strategy. Try to keep your system easy and refrain too many indicators as it becomes very difficult to monitor a complex system which might result in no trades.

No matter what you’re trading – stocks, options, CFDs, forex, oil or other commodities, you should first invest your time in learning the market. In this article I’d like to focus on the forex market because it became so favourite in the current years. One way to learn this market is through fundamental analysis. In fundamental analysis forecasts and predictions are based on the following:

a. Indices – Gross Domestic Production (GDP), Consumer Price Index (CPI), Producers Price Index (PPI), Balance of Payments (BOP), etc.
b. Financial indicators – stock prices, interest rates, bonds and such.
c. Political events of a country are used to measure the stability of its national economy having short / long-term effect on supply/demand ratio of a certain currency.

For instance, since the exchange rate of a currency is based on the interest rate of its country, it rises along with the nation’s interest rate. Why? Because the interest rate indicates the economic situation – if it’s high, the economy is blooming and the country’s currency is in demand. And the currency demand makes the exchange rate to go up. So it wouldn’t injured to follow central banks’ interest rates declaration in order to seize an opportunity when it knocks.

The fundamental analysis also takes into statement traders’ expectations before indices are released. For example, the Weekly Inventory Report is released each Wednesday, so each Wednesday prior to the release the oil prices change. Or another example from the US housing market – when The Existing Home Sales or The New Homes Indices increase, the US dollar usually rises as well.  Traders know or should know these things not to miss out on a profitable deal. The expectations themselves have the power to influence currency quotes because increased investments in a certain currency (based on positive expectations) strengthen it.

Fundamental analysis is especially important in our volatile times and markets. With everything that’s going on in the euro-zone: Greece and Portugal credit rating is downgraded, so the euro’s quotes are constantly declining; UK can’t pull itself out of the crisis and the pound is also not so “hot” right now.

So even if you, the investor, are using the ideal of trading platforms, you should be considering all the things mentioned above and following various indicators and news, because they all influence the forex market as well as others.

For more information about fundamental and technical analysis and online trading news you can visit the Metatrader website. Also on the website information about other trading instruments such as CFD, commodities, oil, etc.