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Getting Started In Forex: Define a Basic Forex Strategy

Discussion in 'Education Centre' started by ProTrader, Apr 22, 2012.

  1. ProTrader

    ProTrader Forex Supporter

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    Technical analysis and fundamental analysis are the two basic genres of strategy in the forex market - just like in the equity markets. But technical analysis is by far the most common strategy used by individual forex traders. Here is a brief overview of both forms of analysis and how they apply to forex:

    Fundamental Analysis
    If you think it's difficult to value one company, try valuing a whole country! Fundamental analysis in the forex market is often very complex, and it's usually used only to predict long-term trends; however, some traders do trade short term strictly on news releases. There are many different fundamental indicators of currency values released at many different times. Here are a few:
    • Non-farm Payrolls
    • Purchasing Managers Index (PMI)
    • Consumer Price Index (CPI)
    • Retail Sales
    • Durable Goods


    Technical Analysis
    Like their counterparts in the equity markets, technical analysts of the forex analyze price trends. The only key difference between technical analysis in forex and technical analysis in equities is the time frame: forex markets are open 24 hours a day. As a result, some forms of technical analysis that factor in time must be modified to work with the 24-hour forex market. These are some of the most common forms of technical analysis used in forex:
    • The Elliott Waves
    • Fibonacci studies
    • Parabolic SAR
    • Pivot points

    Many technical analysts combine technical studies to make more accurate predictions. (The most common is combining the Fibonacci studies with Elliott Waves.) Others create trading systems to repeatedly locate similar buying and selling conditions.

    Finding Your Strategy
    Most successful traders develop a strategy and perfect it over time. Some people focus on one particular study or calculation, while others use broad spectrum analysis to determine their trades. Most experts suggest trying a combination of both fundamental and technical analysis, with which you can make long-term projections and also determine entry and exit points. But in the end, it is the individual trader who needs to decide what works best for him or her (most often through trial and error).
     
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  3. yudistirarizki

    yudistirarizki

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    Sure l attempted them and it acted a piddling since me just at an meter l could not continue improving on my departure and l accepted to blend away the commercialize I am real concerned all but these. curiosity what could i add as these.celebrate apportioning.desire i can buoy check several almost these.
     
  4. kasual

    kasual

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    technical analysis is an analysis based on mathematical calculation while fundamental analysis is based on mathematical economic calculation. the data source of both method analysis is different, so if we expect same output analysis data is impossible. also looks impossible if a trader mix both of analysis method and they said that its support each other.
     
  5. ryuken

    ryuken

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    I think the basic forex strategy that should be in mind is that we are going to be starting with the low cost. and then we are going to be adding more money into the system. that is one thing we have to consider for the spending as well. that said, you should also have backup earning plan too.
     
  6. Decub

    Decub

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    I see Forex Strategy as multi dimensional and not limited to the strategies we employ to make profits. An entirely newbie should always have one thing at the back of his mind and that should not be earning but means to protect his capital. That said, I don't think the issue strategy of stop loss should ever skip his memory.
     
  7. Daisy

    Daisy

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    I see that using a demo for a long time will help me shape my strategy so I think it would also works for many others. When you trade for a long time, you will then see what will help you get profit and prevent losses. For example, my strategy is to trade during weekdays and during Asian london, ny, times since those are high trends. Also, I tend to use stop loss and only trade during a bullish trend. I do not sell to enter cause its harder to gain profit.
     
  8. Pettyeve

    Pettyeve

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    The demo account is the only proven method of developing strategies without investing our money. You have No restrictions of how many years you want to trade in it and how many times you want to build and rebuild your strategy on it. It is just a free place that you can try anything you wish to try.
     
  9. Decub

    Decub

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    That of course is the most ideal place to build a strategy for ourselves especially as newbies since we do not have to risk anything that has to do with our personal investments. It is always the new traders home and a place he tries to pour out all those long notes he sees from Forex manuals.
     
  10. gkintl

    gkintl

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    Fundamental analysis is very complex and cannot be studied very quickly and easily. The simplest method that can be adopted to apply and make trades based on fundamental analysis is through the use of web sites that provide real time economic data. These websites show in green, red and black color. A green color data is usually expected to push the currency price upwards while a red colored data will push the price downwards. Black color or neutral color data will have little or no impact on the price. Furthermore, it should be remembered that cross-pairs usually return back to the where the price movement started after the issue of economic data. Most professionals opt for technical analysis because it is all inclusive. Price movement is simply the sum of hope, fear and greed of market participants. Thus, a good technical analyst will find it easy to trade the market.
     
  11. willy

    willy

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    i think the basic strategy in forex which the newbie must understand it and get training with it with demo account is the broken trend therefore i advice myself and the newbie to learn it very well because it is great strategy
     
  12. Decub

    Decub

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    Understanding also, how to use the different tools in the trading platforms is quite essential. It helps the newbie understand which to use at a particular time and the function they perform. Forex is very complex and requires a smarter approach to it.
     
  13. Pettyeve

    Pettyeve

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    The newbie trader can start learning how to build his or her own strategy by learning how to make use of the expert analysis. The expert analysis will help him or her to be able to learn how to trade very well and to be able to develop his or her own atrategy.
     
  14. Dmitriy Ushakov

    Dmitriy Ushakov

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    Currency exchange offers several options of the trading process: the long, medium or short-term operation. Choosing a strategy is individually made by traders
     
  15. sininfinity

    sininfinity

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    Well to newbie trader I would recommend to try various things that they come across and think is beneficial. At first they will fail several times but from those failures they will learn some valuable lessons.
     
  16. Tom Latham

    Tom Latham

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    According to your technical analysis! I must say; last 3 points are very much useful for identifying the technical points of market! But, I have no experience on Elliot Wave; no I don’t know the advantages of EW.
     
  17. winchent13

    winchent13

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    I once tried to figure out EW, and I need to say, that it's an extremely difficult thing. Although, based on how popular wave analysis is among traders, you can understand that it's quite effective.
     
  18. Richards

    Richards

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    If you want to start well in the trading world then you have to learn and practice well. This learning and practice will lead you towards a strategy which will be your strength. A trader with a sound strategy is the millionaire of the world. Do you agree?
     
  19. Svetlana Loboda

    Svetlana Loboda

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    My 1st years were so much challenging since, then I was without a particular trading system. Actually, it takes such a long time to make a profitable trading system; but now I’m confident with my trading system & my experience! Although, I am not looking for 100% profit ratio here.
     
  20. Mazi

    Mazi

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    Svetlana, I like very much your story. I think that this is story of many traders on this market. I think that it is not possible to make 100% profit strategy, but we should all strive to achieve higher results by learning through experience and improving through learning. Right?