Forex Strategies- How to Choose the Right One for You

Forex Strategies- How to Choose the Right One for You

Forex Strategies- How to Choose the Right One for You

There are many forex trading strategies out there but we will focus on the two main ones: Technical analysis and fundamental analysis. First of all, let’s explain what Fundamental and Technical Analysis are?

Fundamental Analysis    

This form of analysis enables you to value an entire country which can be extremely difficult at times. It is used in order to predict long terms tends. A lot of traders prefer to trade short term and base their trading on news releases alone which consist of the following (a partial list):

  • Retail Sales​
  • NFP (Non- Farm Payrolls A monthly report issued by the U.S Bureau of Labor Statistics, which states the total amount of paid U.S workers, (without including general government jobs, nonprofit organizations, private households and farm employers).
  • CPI- Consumer Price Index- examines the weighted average of consumer goods and services (such as food, medical care, transportations etc in order of importance) .

Please note that there are a lot of other meetings, occasional commentary and the Fed’s chairmen’s quotes that have an influence of the market.

One important tip to follow is to keep an eye on the economic calendar in order to get live updated which will help you make wise decisions.

Technical Analysis

Technical Analysis is trying to analyze the future price movement (either up or down) based on past price movements, which are great indicators to where the current price might reach. Though it is not an exact science, the various charts provide a fair amount of likelihood which can help traders immensely.

Here are the common forms of Technical Analysis used in the Forex market:

  • The Elliott Waves Theory- In the late 1920s, Ralph Nelson Elliott discovered that stock market does not, in fact, behave in total chaos, but rather in cycles that repeat themselves and are as a result of the traders reactions to external influences.
  • The Fibonacci Retracement This is a term that refers to areas of support or resistance. The key Fibonacci ratios are 23.6%, 38.2%, 50%, 61.8% and 100%.
  • Pivot Points- This is a Technical Analysis indicator which determines the main trend of the market on different time frames. The pivot point is the average of the high, low and closing prices from the previous trading day. Trading above the pivot point shows a bullish trend while trading under the pivot point shows a bearish trend.

You can use two instruments together in order to get a more accurate view of the market.

How to choose the strategy that works for you?

There are a lot of instruments in which a trader can choose to work with. While some traders prefer to work with one strategy, others prefer to combine several ones in order to determine their trades. The common method is to combine both Fundamental and Technical Analysis. At the end of the day- you should choose what you most feel conferrable with.

Found this interesting? Feel like you’re ready to trade? Open an account here

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Share on email
Email

Recent .

Dogecoin is going to the moon… literally!

Dogecoin is going to the moon… literally!  While the cryptocurrency markets have been put through the mill the past few weeks, Dogecoin managed to steal the spotlight …

Read More →
Stock of the Week: Apple in huge demand, beats estimates by billions.

Stock of the Week: Apple in huge demand, beats estimates by billions. Apple beat estimates for quarterly earnings by billions of dollars. We look at …

Read More →
Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!  

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!   It has been a momentous week for Facebook CEO Mark Zuckerberg who …

Read More →
Big Tech earnings roll in – Huge profits for Google, Microsoft and more! 

Huge profits for Google, Microsoft and more! Major big tech companies have released their quarterly earnings. We look at how some of the world’s biggest businesses performed so far this year!     Google, …

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin bounces back: Is buying the dip worth the risk?

Bitcoin bounces back: Is buying the dip worth the risk?  Bitcoin has recovered some of its losses following its fall from a record high of $65,000. Considering the crypto king’s astonishing performance in 2021, should …

Read More →
Oil summit: Waste of time
Oil market outlook: bumpy ride ahead?

2020 has been disastrous for the oil markets, however, it appears that oil has recovered most of its losses and is now hovering near pre-pandemic levels. In today’s article we will take a look at oil’s recent performance and explore the opportunities that may lie ahead.

Read More →
˄