Simple Forex Trading Strategies that Work

The idea of developing solid forex trading strategies is based on the necessity of getting around market noise and false trends with a strategy or rather family of forex trading strategies. One such strategy is based on daily trend analysis through swing trading theory. This analysis identifies the underlying daily trend, and makes the assumption that news cannot change that daily trend. The forex trader then looks for days where the market deviates away from its established trend, that is it trades in the counter direction. And the assumption there is that the market will get back to its previous trend. Entire currency trading strategies are based on this theory, and the assumptions are very safe to make. Things can go wrong, but not without any prior hint. The daily chart carries a lot of weight, and many warning signals. Anything from divergence signals to LSS pivot levels, can act as a warning signal. It is extremely unlikely that the market will make a sharp move, out of the blue, without any signals in place. Most traders miss these signals because there is too much ambiguity and there are many conflicting ones as well. A forex trading business opportunity could be based on any such strategy, with focus on the daily chart. Meticulous planning is required, but the goals and objectives don’t have to be rigorously defined. Traders need to be careful with assessing probability, volatility, the impact of volatility, and various other parameters. In any case, the daily chart is the most useful chart, because the time frame based on the daily session, is the most accurate one. Swing point analysis provides all the basic information about the trend. And when in conflict with moving averages, traders need to focus on the swing point theory. Then, there is chart pattern analysis and day to day analysis which also powerful. These patterns carry more weight than off-chart indicators.

Forex Trading Strategies of the Wise Traders

Wise veteran traders do use methods which rely on creative thinking and are not restricted to one style or another. These forex trading strategies may borrow one thing from day trading, another from swing trading, and another from investing. You might think that investing is not relevant to day trading, but you’d be wrong. The mindset of the investor is necessary in order to understand week-to-week fundamental trends in a currency pair. Things such as interest rates, inflation reports, and the state of the economy of a country are medium-to-long-term factors. And relevant at least once every three months. These factors can have catalytic impact on a single trading week. And they can determine whether the currency in question will for example recover from a sharp decline or not. So even though day trading forex live review reports and theories fail to mention long term factors, these factors are important. Swing trading theory attempts to define solid support and resistance levels. That is what many traders need to know. But the answer is often a range of prices, rather than a couple of thin pivot numbers. The market can sometimes breach a pivot level and yet not reverse. That’s what a false breakout move is.