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Forex Trading Techniques - Read It Here
I have been trading Forex full time over 7 years now and have come across diverse Forex trading systems and methods.
Subsequent to many trials and errors I've come to the conclusion that simple is best, therefore I have reduced my trading into 3 categories:
1. Forex news trading - this means utilizing the volatility surrounding economic announcements such as NFP, GDP, CPI and others. For this I have software that broadcasts the news in real time and can actually hit the sell or Buy buttons. Quite often your order will not be executed so it is possible to enter on a retrace, based on the news direction.
2. My own Forex trading methods and strategies, these basically come down to 2 basic methods:
2.1. Buying support and selling resistance, based on calculated pivot points, Fibonacci numbers and trend lines.
2.2. Rapid scalps which involve trading for very small moves and minimizing risk. This requires some practice, but once mastered it can be easy to make money .
3. Third party Forex Trading systems - there are numerous systems for sale and most of them are ineffective, written by Internet marketers for the sole reason of making money for the marketer. These systems are a complete waste of time but the sales pitch is very good. I have found a few that work well and balance my own trading methodology.
Timing and time in Day Trading
It is highly important to understand the time that you choose to trade in and grasp what you potentially expect at that time of day. This is different from instrument to instrument, so it is important to study market behavior for your trading instruments. I usually trade only 4 instruments; the DAX, Euro, Japanese Yen and the GBP/USD, and I am very familiar with their behavioral patterns during the trading day.
Other instruments behave differently and I will only trade them (I do irregularly trade WTI, Nat Gas, and other currencies) after I've understood their time related behavior. Most of my trades outside of the DAX and GBP/USD are economic announcement related and of course, when figures are released a different volatility is in place which is commonly out of the usual patterns.
The best time to trade the DAX (German Index, and moves closely with the DOW chiefly) is close to the London open at 08:00 (03:00 EST), as the open usually brings a large rush in volume and it's easy to scalp. Sometimes the scalp will turn into a longer term trade, if a trend develops, however it is often possible to achieve a gain of 20 - 40 points in the first half hour of trading. As my daily target is 30 points and it is often hit within 30 minutes, I can then relax and look for great set ups that will not risk the profit.
Some of my fellow traders will stop trading then and do something else. It certainly gives one plenty of time, but those 30 minutes require intense focus.
If you need more information please check my blog by clicking the link.
The blog also contains live trade examples and videos.
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