Foreign Exchange Trading Systems - Major Trading Systems
I have been trading Forex full time over 7 years now and have found numerous Forex trading systems and methods.Subsequent to many trials and errors I've come to the realization that simplicity is key, therefore I have reduced my trading into 3 categories:
1. Forex news trading - this means trading the volatility surrounding economic announcements such as NFP, GDP, CPI and others. For this I employ software that broadcasts the news as it happens and can actually click the sell or Buy buttons. Quite often your order will not be executed so it is possible to enter on a bounce back, based on the news direction.
2. My own Forex trading methods and strategies, these fundamentally come down to 2 simple methods:
2.1. Buying support and selling resistance, based on computed pivot points, Fibonacci numbers and trend lines.
2.2. Rapid scalps which involve trading for 2-4 points taking a very small risk. This requires some practice, but once mastered it can be easy to make money .
3. Purchased Forex Trading systems - there are many systems for sale and most of them are useless, written by Internet marketers for the sole reason of making money for the system owner. These systems are a complete waste of time but the sales pitch is very good. I have found several that work well and complement my own trading methodology.
Timing and time in Day Trading
It is highly important to understand the time of day that you choose to execute trades in and know what you potentially expect at that time of day. This differs from instrument to instrument, so it is highly important to study market behavior for your trading instruments. I normally trade only 4 instruments; the DAX, Euro, Japanese Yen and the GBP/USD, and I am pretty familiar with their behavioral patterns during the trading day.
Other trading vehicles have different behavior patterns and I will deal in them (I do occasionally trade WTI, Nat Gas, and other currencies) after I've understood their time related behavior. Most of my trades excepting the DAX and GBP/USD are economic announcement related and of course, when figures are made public a different volatility exists which is commonly out of the regular patterns.
The best time to execute trades in the DAX (German Index, and moves in tandem with the DOW chiefly) is soon after the London open at 08:00 (03:00 EST), as the open usually brings a large rush in orders and it's an easy time to scalp. Sometimes the scalp will turn into a longer term trade, if a trend ensues, 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 achieved within 30 minutes, I can then relax and look for absolutely perfect set ups that will not risk the profit.
A few 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 concentration.
If you'd like to learn more please check my blog by clicking the link.
The blog also contains live trade examples and videos.
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