Currency Trading Strategies

In this article we will look at different currency trading strategies that can be used effectively to profit from forex trading. A currency trading strategy is just like a sports betting strategy or poker strategy in many respects. The forex market is very volatile in nature, sometimes even completely unpredictable.

With these currency trading strategies, you will avoid the most common pit-falls that many forex traders, expecially beginners fall into. Hence if you want forex currency trading explained in simple terms, then these 9 tips will set you in the right direction.

These simple Currency trading strategies are not only simple, it will also give you a link to a free ebook on how to read charts effectively for sure fire profits!

Fundamental analysis can be used by day-traders who have the time to watch the market to the minute. The forex news and market is particularly prone to short-term movements. Hence, 'timing' is of greater importance as fundamental analysis-based trading requires precise timing totrade the movementsofthe markets.

In business, when you plan your strategy you follow a process of answering questions about your business, where it is now, where you want it to go and how you'll take it there. It's the same with setting strategies for your currency trading business. Consider these three questions and answer them fully and honestly.

Support and resistance levels and trend lines can be plotted on charts to determine price trends or ranges. Momentum indicators can be used to provide additional information about price movement and to determine buy and sell signals. The forex market usually trends strongly so our currency trading strategies are usually trend-trading strategies.

Forex technical analysis is a currency trading strategy that analyses charts in an attempt to forecast future price movements. The process is about analyzing market data, price trends, trading volumes and more in order to make a 'guesstimate' of where the price is heading.

Daily Special instant forex signals on two currency pairs in Europe currency market.

Each of these trading strategies is “transparent” because the rules for executing the underlying trades are explicit. And each of the strategies is easily implemented, in part because they are so well known and straightforward, but also because execution costs in currency markets are so small.

Whenfinding buying or selling points, many currency trading strategies make use of patternsand identifiedsupport and resistance levels, the most important signals in forex trading.There are many other technical indicators and to name a few are the Relative Strength Index (RSI), Commodity Channel Index (CCI), and moving averages.

A good money management principle is never to leverage more than 1/5th of your trading capital at any one time. For example, with $25,000 of trading capital, you should never use more than $5000of yourmargin deposit at any one time, which is about 5 regular sized contracts.

Most forex trading platforms, in addition to including a forex currency converter as well as a free forex charting, also have functionality to program your own trading strategy. You can program it to buy and sell at specific points as well as more advanced programming for advanced forex traders.

An important concept of forex money management is the application of the risk/reward ratio. Before you enter a trade, you need to work out how much you intend to make from that trade and how much you are willing to risk. Generally a risk/reward ratio of about 1:1.5 or greater is necessary.

Then you can test your trading strategy, modify it and hone it. The likelihood that your initial trading strategy is going to work is very slim. Good, successful, money making currency trading strategies are developed over time.