Forex strategy – Getting the Edge in Foreign exchange Forex (short for Foreign exchange) trading is becoming an increasingly lucrative business with the onset of online Forex trading. Compared to other types of investment, like corporate stocks, successful Forex trading can realistically earn profits of up to 100 %+ per month. However, before you go diving headlong to the Forex market and realistically lose your entire capital, it is important to note that Forex trading can be extremely risky and unprofitable without the basic knowledge of money management and financial analysis. The exchange market can be very volatile at certain times, following various up-and-down trends in a single day. Without the proper analysis tools, you can be throwing away your capital into a bottomless pit.
Forex strategy – Getting the Edge in Foreign exchange ( Courtesy of HenryLiuForex.com )
Forex strategy – Getting the Edge in Foreign exchange Even with the risks, currency trading is still a very profitable investment avenue. Compared to other types of investment markets, the trading system of foreign exchange market is very flexible. The exchange market never closes (except for weekends) and is separated into the main five time zones: New York, London, Frankfurt, Paris, Tokyo and Zurich. Forex trading occurs around the clock, and trading opens in each of the different markets for each time zone. This means that a trader can always enter and withdraw from the market whenever he wants to, giving the trader the liberty to trade anytime. With the onset of online Forex trading, you can join an online Forex club and trade almost anywhere (as long as you have a computer with an Internet connection). The traders don’t need to go to their country’s central bank (or its affiliates) to open a trading position. Forex strategy – Getting the Edge in Foreign exchange ( Courtesy of HenryLiuForex.com )
Forex strategy – Getting the Edge in Foreign exchange
Technical analysis – The important points in Forex trading To the uninitiated, the rise and fall trend of Forex trading can be chaotic and hard to predict. You can be earning an hour ago, and losing heavily in the next. Without technical analysis of the trends and the proper application of the analyzed facts, a trader will rarely break even, let alone earn profitable results. Forex brokers estimate that more than 80 % of traders lose their money, and less than 10 % can break even, and only a tiny fraction of those people can earn anything at all. Forex strategy – Getting the Edge in Foreign exchange ( Courtesy of HenryLiuForex.com )
Forex strategy – Getting the Edge in Foreign exchange
Different people take differing approaches in trading Forex, each with varying results. Traders employ different strategies, according to their own judgment and bias. The most common of them are Elliot Waves, Fibonacci Studies, Bollinger bands, Parabolic SAR, and Pivot point studies. Each of them has their own algorithm that try to predict the possible movement of the exchange rate based on existing data (the recent movements of trends, the economic trust, the current events of the country that owns the currency, etc.). Most traders mix different strategies depending on the situation, perfecting their own unique strategy as they gain experience with Forex trading. Forex strategy – Getting the Edge in Foreign exchange ( Courtesy of HenryLiuForex.com )
Forex strategy – Getting the Edge in Foreign exchange Forex education – Experience Matters While there are many possible Forex strategies exist, none of them can boast 100 % accuracy. Trends can rise and fall in any minute. Even with the perfect strategy, you’ll be losing trades often. However, a successful trader doesn’t count how many bad trades he had, but how much he earned from the good ones. A successful trader does not fully rely on his current technical analysis and Forex market approach; he keeps track of his losses and tries to understand what made the trading turn bad, as well as keep track of his profits and try to sharpen his skills from what he learned. Therefore, Forex trading is not just purely technical analysis. In order to cope with a dynamic market like Forex, a trading strategy needs to be versatile and flexible. Needless to say, acquiring these skills require experience and education that cannot be acquired just by reading about them. In order to learn Forex, you must work with it.
Forex strategy – Getting the Edge in Foreign exchange ( Courtesy of HenryLiuForex.com )