Forex Trading Strategies : Basic Strategy

Forex trading strategy #1 (Fast moving averages crossover)

Trading systems based on fast moving averages are quite easy to follow. Let's take a look at this simple system.

Currency pairs: ANY

Time frame chart: 1 hour or 15 minute chart.

Indicators: 10 EMA, 25 EMA, 50 EMA.

Entry rules: When 10 EMA goes through 25 EMA and continues through 50 EMA, BUY/SELL in the direction of 10 EMA once it clearly makes it through 50 EMA. (Just wait for the current price bar to close on the opposite site of 50 EMA. This waiting helps to avoid false signals).

Exit rules: option1: exit when 10 EMA crosses 25 EMA again.

option2: exit when 10 EMA returns and touches 50 EMA (again it is suggested to wait until the current price bar after so called “touch” has been closed on the opposite side of 50 EMA).

Forex Overview

Forex overview
What is Forex? Forex is an abbreviation of Foreign Exchange (also referred to as FX) and it is the largest financial market in the world.
The Forex market is the place where currencies are traded (currencies are money that is used as an exchange medium). In other words, it is the place where currencies are being sold and bought. In the Forex market all currencies are traded in real time.
Trading with currencies always means that there are two simultaneous transactions taking place. If a currency is being bought, it is also being sold. To better understand this notion, think of currencies as both the goods you are buying AND the method with which you're paying for the goods.
Since the Forex market is the place where currencies are traded in real time, people may trade one currency for another and make a profit off of this transaction. Profits are made when one is able to determine which currency's value will increase by the end of a pre-determined time period (such time periods may be short or long). The Forex market is open 24 hours a day, five days a week and it is based in four major cities: New York, London, Sydney, and Tokyo. The Forex market is open to individuals over the age of eighteen.
While Forex trading may sound daunting, it really isn’t. It can be easily comprehended and understood without prior experience in finance or economy. It is challenging and exciting, thought provoking and manageable, stimulating and filled with opportunities.
Some Forex Basics:
The first currency listed in a currency pair is called the "base currency".
The “base currency” is usually the U.S. Dollar. Traders will generally trade the U.S. Dollar against another currency, which is called the “counter currency”.
Currencies are quoted in pairs. For example: The pair U.S. Dollar and JPY will be quoted in the following way: USD/JPY equals to 2.5 (This means that 1 U.S. Dollar can buy 2.5 JPY).
When a quote increases, it means that the “base currency” has risen in value and the “counter currency” has weakened in value. For example: If the USD/JPY quote used to be equal to 2.5 but is now equal to 2.6, then this means that the dollar has strengthened (because 1 U.S. Dollar can now buy 2.6 JPY as opposed to the mere 2.5 JPY it could buy beforehand.)
Now that you know a thing or two about the Foreign Exchange market, we invite you to explore eToro—the Revolutionary Forex Trading Platform. You too can make your mark in the Foreign Exchange market. Use eToro as your gateway to the ever-growing world of Forex trading.

Build Your Own Profitable FOREX Trading System in Five Simple Steps

If you want to make big profits, then you should know that the best way is do it for yourself - and not rely on others.
Any trader (even a novice) can build a successful FOREX trading system - and this article shows you how to build a profitable system in five simple steps.
What Makes a Successful FOREX Trading System?
Successful trading systems have three main characteristics:
1. They are Simple
Forget complicated systems with lots of rules - it’s a proven fact that simple systems work better - and are less likely to fail, in the brutal world of trading.
2. They Run Profits and Cut Losses
You need to have a longer term FOREX trading system that milks the big trends for profit, and cuts losses quickly.
3. They Follow Long Term Trends
There is no point in trading for small profits - i.e. day trading, as you will never cover your inevitable loses with small profits.
Focus on long-term trends - it’s these that yield the big profits, as they can last for years.
Now let’s get down to the five steps of building a FOREX Trading System:
1. Your Method
We have said to keep it simple, and this is exactly what you should do - just a few rules, and a robust money management system.
2. Spotting Opportunities
Look for the long-term weekly trends, and then move to daily charts to time entry. When we say long-term trends, we mean months, or years - NOT just a week or two.
3. The Best Way to Trade Currencies is via a Breakout Method.
Breakouts occur in all currency markets all the time - so base your system on a trend following breakout system.
There isn’t space here to describe exactly what a breakout system is, but we have articles on breakouts posted on our web site.
It’s a fact that most of the world’s billionaire traders use breakout systems in their trading - and you should use a breakout system as well.
4. Timing Entry
The best way to time an entry is to watch for a break on the chart, confirmed by stochastics crossing with bullish or bearish divergence – this is a great timing tool.
When you are in strongly trending markets, you can also use Bollinger bands, to time your entries - and take profits.
The Bollinger band is a great filter indicator, and all traders should consider it.
5. Money Management
If you are following a breakout method, either the trade runs quickly in your favor - or the break is “false” and quickly reverses.
Don’t put your stop just below the breakout point! - If the trade does not follow through within the day, exit the market, and use a monetary stop in the day session.
A Simple F0REX Trading System for Profit
With the above system, you will focus on the longer-term trends - and milk them for maximum profit.
You will also not trade frequently, and you will liquidate losers quickly.
We don’t have space here to go through how to use the indicators, but with a bit of research and testing you will see why a FOREX trading system built on the above principles, will work, and will continue to work.
The system will give you a lot more profit than the so called predictive, over hyped complicated systems, sold by vendors and guru’s – these systems only work in back testing.
Build yourself a FOREX trading system - and see for yourself, just how profitable they can be!