Forex Trading Strategies And Systems

I've been trading the forex markets for several years now so I've developed quite a few different systems in my time. However there are some that are more profitable than others, so let me share you with you some of my most profitable forex trading strategies.
4 Hour Trading Strategy

I created this trading strategy myself and have been using it for several years now. This one system has generated more profits that any other system I have ever used, and yet it's surprisingly simple.

I simply look at the daily trend for a particular currency pair (usually the GBP/USD, EUR/USD or USD/JPY pair) using a very simple but effective technical indicator, then I wait for two EMAs (exponential moving averages) to cross over in the same direction on the 4 hour chart.
I will then enter a position (usually after a slight pull-back) and will employ a two-part exit strategy to maximise my profits. One half of the position will be closed out early for a safe profit, and the other half will be left to run for as long as possible in order to capture those really big price moves.
As I say, this particular forex trading strategy is highly effective, as regular readers of my blog will know because I share my trading results every week in my 'Weekly Trading Updates'.
Anyway if you would like to read all about my 4 hour trading method, you can access it (for free) by filling in the short form to the right and subscribing to my newsletter.
The only problem with trading this strategy is that there will always be quiet periods and particular days where you know you are not going to get any set-ups on any of the major currency pairs. Therefore at times like these I will often employ some of the other trading methods that I keep in reserve:
CCI Divergence Trading System
This is a forex system that I've recently created and it basically uses the popular CCI indicator with two different settings. The key here is to wait until there is divergence between both of the CCI indicators at the same time because this will give you a set-up with a very high success rate.
You don't get that many good set-ups per day using this trading strategy, but when you do, you are likely to make some decent profits because it is a very high probability set-up.
I have discussed this particular strategy elsewhere on this blog so please click here if you want to find out more about this CCI Divergence Trading System.
Forex Income Engine 2.0 Methods
At the time of writing (20 June 2009) I've just started using the three day trading methods included in the Forex Income Engine 2.0 course as well. I've always been quite sceptical about many of the short-term forex methods that I come across, but I've been very impressed with these three methods so far because they do actually produce some very good returns.
Anyway if you would like more details about each of these methods you can read all about them on my Forex Income Engine 2.0 review page.
Forex Nitty Gritty Method
This trading method was included in the Forex Nitty Gritty course and although it is a very basic method, it is actually surprisingly effective. The goal is to look for pairs that are in strong upward or downward trends, wait for a pull-back, and then enter a trade if the trend continues.
I've been using this method on the 15 minute charts for quite a while now and it has always performed well for me because these continuation trends occur all the time.
Again if you would like to find out more about this particular trading method, you may like to read my full review of Forex Nitty Gritty.
Long-Term Trading Strategy
I'm not really a long-term trader but I do occasionally open a position if a good trading opportunity arises. I will usually use the daily charts for these trades and will look at a variety of indicators such as the 200 day moving average, the supertrend indicator, established support and resistance levels, fibonacci levels if applicable, and Marketclub's excellent trading signals.
I will regularly post my long-term analysis of the various currency pairs on this blog, but I will only follow this up with an actual trade if I'm really confident about my predictions.
Other Forex Trading Strategies
Finally as well as all of the trading systems and strategies listed on this page, I also have a few breakout strategies that I like to use when a good opportunity presents itself. I'm also constantly testing out new ideas and reviewing the various trading systems that I get sent regularly by product owners who want me to promote their product.
However for the most part it's my 4 hour trading strategy that I spend most time on because this is my core system which generates the most consistent and reliable profits. All of the other forex trading systems are used to boost my trading pot during the quieter periods of the week.

Things you Should know about Forex Trading Before you Trade Real Money

How difficult is it to make money trading the Forex market? How much time does it take to actually be able to make a living trading the Forex market? These and other important aspects of trading are to be discussed in this article.
Trading the Forex market has many benefits over other financial markets, among the most important are: superior liquidity, 24hrs market, better execution, and others. Traders and investor see the Forex market as a new speculation or diversifying opportunity because of these benefits. Does this mean that it is easy to make money trading the Forex Market? Not at all.
Forex brokers agree that 90% of traders end up losing money, 5% of traders end up at break even and only 5% of them achieve consistent profitable results. With these statistics shown, I don't consider trading to be an easy task. But, is it harder to master any other endeavor? I don't think so, consider musicians, writers, or even other businesses, the success rates are about the same, there are a whole bunch of them who never got to the top.
Now that we know it is not easy to achieve consistent profitable results, a must question would be, Why is it that some traders succeed while others fail to trade successfully in the Forex market? There is no hard answer to this question, or a recipe to follow to achieve consistent profitable results. What we do know is that traders that reach the top think different. That's right, they don't follow the crowd, they are an independent part of the crowd.
A few things that separate the top traders from the rest are:
Education: They are very well educated in the matter; they have chosen to learn every single and important aspect of trading. The best traders know that every trade is a learning experience. They approach the Forex market with humility, otherwise the market will prove them wrong.
Forex trading system: Top traders have a Forex trading system. They have the discipline to follow it rigorously, because they know that only the trades that are signaled by their system have a greater rate of success.
Price behavior: They have incorporated price behavior into their trading systems. They know price action has the last word.
Money management: Avoiding the risk of ruin is a primary subject to the best traders. After all, you cannot succeed without funds in your trading account.
Trading psychology: They are aware of every psychological issue that affects the decisions made by traders. They have accepted the fact that every individual trade has two probable outcomes, not just the winning side.
These are, among others, the most important factors that influence the success rate of Forex traders.
We know now that it is not easy to make money trading the Forex market, but it is possible. We also discussed the most important factors that influence the rate of success of Forex traders. But, how much time does it take to have consistent profitable results? It is different from trader to trader. For some, it could take a life time, and still don't get the desired results, for some others, a few years are enough to get consistent profitable results. The answer to this question may vary, but what I want to make clear here is that trading successfully is a process, it's not something you can do in a short period of time.
Trading successfully is no easy task; it is a process and could take years to achieve the desired results. There are a few things though every trader should take in consideration that could accelerate the process: having a trading system, using money management, education, being aware of psychological issues, discipline to follow your trading system and your trading plan, and others.
by Raul Lopez
http://www.straightforex.com

Forex Trading for Dummies An article looking at forex trading at a very basic level. Great overview of the concept of currency trading.

Anyone new to the foreign exchange market, through no fault of his own, will have a hard time understanding what it is all about. The foreign exchange market after all, is the world’s largest financial sector, involving an average of $1.8 trillion cash value traded per day.

The foreign exchange market is actually a vast market composed of many-tiered levels and many participants. Online traders contribute only 2% of the total cash value traded. This shows just how intricate the foreign exchange market really is.

What makes foreign exchange even more problematic is that it has developed a jargon all on its own such that its terms are no longer what they mean in common parlance. Although the task of understanding what the foreign exchange market is, is overwhelming, it is not impossible.

The Big Picture

A large company in South Africa ordered tons of marble from a small company from a province in Taiwan. In the old days, the company in South Africa would have a hard time paying for the marble as it not only would have to ship millions of South African money to Taiwan but it would also have to pay the small company in Taiwan in its own currency or else, the money will be useless.

With the foreign exchange market, paying for goods and services rendered by one country to another is no longer difficult. Through computers, there is no longer any need to ship money. All the South African company would have to do is to go to a bank and pay that bank in whatever currency and that bank will transfer the amount to a bank in Taiwan which will pay in whatever currency the small company in Taiwan wants. For profit, the bank will ask the South African company to buy the currency at a slightly higher price and pay the small Taiwan company using the current exchange rate.

The Small Picture

On the computer, a 21-year old jobless fresh graduate earned $10,000 in a few months. In April, he bought Euros to try out his luck in currency trading and to his surprise, the price of Euros soared by June and continued to soar until December. By December, he sold all his Euros, on a tip-off by an online friend that most of the European countries involved in the war in Iraq will be boycotted by those countries not in favor of the war. The tip-off was correct and in less than a month, the Euro’s value slipped lower than its original value when this jobless fresh graduate first bought them.

Many people have found, just like this jobless fresh graduate, how simple it is to earn through currency trading. Even a dollar capital can snowball into thousands of dollars if you know when to buy and when to sell. Etched in stone, all currency traders have but one motto: buy low and sell high. The jobless fresh graduate took a risk by buying Euros. He held on to the currency until it gained value and, as soon as he realized the value might lessen, he sold the currency for another.

What is Forex Robot?

A forex robot is a piece of software that will automatically handle the currency trading process for you, it enters and exits trades with the goal of making a profit. A lot of traders eventually switch to a piece of software like this because they are tired of entering in all these trades manually. When you’re trading manually you have to spend a lot of time each day keeping up with the market, and you have to spend a huge amount of time staying current with the trades you have active. A Forex robot can take the pain out of this process for you, eliminating the need to enter this information manually.

The majority of Forex robots will only come prepackaged with one specific way to trade. They only have one set of rules they follow, no matter what the market conditions could be, they’re built to trade strictly currency pair. Because the market is constantly changing hour by hour this can be a big problem, as each currency pair will need to be treated differently. This is why the very best Forex robot is quite different from the others, Forex experts are constantly updating the software, these people monitor the market 24 hours a day.

Another Post for Forex Newbies

Forex, also referred to as 4X or FX, stands for Foreign Exchange. This is the name of the financial trading market that involves the trading of Currencies. The Foreign Exchange Market is made up of banks and brokerage firms who are connected over an electronic network that allows them to convert the currencies of most countries in the world.

Currency Trading - The Best Business In The World
What's Forex? From that headline you may be wondering what qualifies me to say that currency trading is the best business in the world. It definitely is in my own opinion though due to the lifestyle it so easily allows me to enjoy. There isn’t the hassle that you often get with so many other ways to make money either. There is also the flexibility that comes with currency trading as you can do it from anywhere you desire. You can also make money no matter what the economy looks like out there. I want to share with you some of the reasons why I think that currency trading is definitely the best business in the world!


Currency Trading Reason #1: Anyone can do it
Anyone can make money with currency trading. You do have to learn the basic skills involved but you can do it no matter what your background is. If you are tired of the commute to work as well as the 9-5 schedule then allow yourself to break free from it. You will feel happier than you have in a long time due to being able to decide when you are going to work.


Currency Trading Reason #2: You can do it from anywhere in the world
As I mentioned before you can do it from anywhere in the world. All you need is access to the internet and you can do it. You can do much more with your family than you have been able to do in the past. No more missed ball games because you can do your work when it fits into your daily plans. So if you want to go to the beach for the week do it! There isn’t anything to stop you any more!


Currency Trading Reason #3: Learn a Skill for Life
The skills you end up learning relating to currency trading will pay off in the long run. This isn’t any get rich quick scam or anything new. People have been doing it for a very long time. Currency will always be there too as a way for us to buy and sell things no matter which part of the world you happen to live in. You will be able to make money all the time with currency trading. You can control how much you make too based on how many hours you want to work. It all depends on the type of lifestyle you wish to enjoy.

I strongly encourage you to look into currency trading and what it has to offer. I have only touched on a few of the basic rewards it has to offer you here. Take the time to read more about currency trading and I think you will be motivated to get started with it. You can reclaim your life again by working when you want, making plenty of money, and being your own boss. Once you do so I am sure you too will agree that currency trading is the best job in the world!