Forex Strategies

Forex Strategy Secrets – How Does Forex Scalping Robot Attract Some of the Traders?

September 11, 2011 By thsmartm 8 Comments

Article by Loic Jouanelle

There are a lot of strategies in forex trading. The most popular of them is the forex scalping strategy. Do you know about this strategy? Have you asked yourself about it?

The other traders have been criticizing forex scalping strategy but still others have a quick responsiveness to know about it. Do you know why this strategy attracts traders?

Forex scalping in simple terms refers to making transactions in a shorter span. It is a forex trading strategy on short time frames. For example, a one to 5-minute charts that has quick buy or sell transactions extract between 2 to 15 pips from the session. It is a go-getting form of trading that has huge opportunities. A lot of traders consider this strategy as the most available and acceptable one over the forex market. The quick transactions of forex strategy are often executed with larger sizes so that the smaller amounts of pips scalped will result to high profit. This kind of strategy needs a lot of money.

A big number of forex traders attracted to scalping strategy because of considering it a secure way of trading. It is a safe way trading to the fact that a forex trader just holds all their positions for a short time if to compare with some regular forex traders. Traders are exposing themselves to the market unpredictability for a short time. A lot of them will not consider the concepts of trends, patterns, and ranges. They are often interested in ask and bid spread.

The scalping strategy generates profit but it is necessary to take note that this kind of strategy is not always applicable to the modern forex market. It works only to patient traders who are willing to forego huge profit opportunities. The scalping trading strategy disappoints these forex traders who wish to make some large splashes on this kind of market.

Nowadays, traders are going for short-term trading than long-term strategies. Because of this, a forex scalping robot is available in the internet. It is a robot used primarily to automate the trading activities of a forex trader. If you’re a short-term trader, you might want to consider this valuable tool.

There are various robots marketed in the web. A good forex scalping robot should help the trader take advantage of the currency fluctuations in the forex market. It should have applications needed for short-term trading. Forex scalping robots can be a great help to forex traders.

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Forex Strategy – How The MACD Indicator Can Save You Anxiety

September 11, 2011 By thsmartm 4 Comments

Article by Forex Indicator

Regardless of your Forex strategy, have you ever entered trades and shortly afterwards wished you hadn’t? The information that follows will hopefully cut down greatly on the number of trades that cause you anxiety!

The MACD (Moving Average Convergence Divergence) indicator can add a degree of certainty to your Forex strategy.

As with any indicator, it is too risky to enter trades on this signal alone. However, as we will see, used with caution on higher time frames, it can help confirm you are going in the right direction and that your trade is higher probability.

Taking MACD Apart

Let’s take MACD apart and describe it’s component parts.

The default MACD on most charting packages sets 2 EMA’s (Exponential Moving Averages) at 26 and 12 days.

This is represented by a colored line (color varies according to charting package) which crosses a different colored 9 EMA often termed the trigger line.

When MACD (the 12/26 EMA) crosses above the trigger line (9 EMA) upward momentum is indicated and vice versa.

A center line, or zero line, often called the water line is also shown in the MACD indicator. When MACD is above the water line an upward trend is indicated, when it is below the water line, a downward trend is indicated.

MACD also includes a histogram, small vertical lines that appear above or below the zero line, not unlike mountains and valleys in appearance.

MACD is a lagging indicator which follows price action.

The histogram is an indicator of MACD. So watching the histogram can give you an early indication of where MACD is going. The height of the histogram can be a good momentum indicator.

Using MACD As A Safety Indicator

How can you use MACD to your advantage?

If you want to be very cautious in your Forex strategy, going only for high probability trades, then pay attention to MACD on the 4 hour and 1 hour charts.

Some traders will only enter a trade when the 4 hour and 1 hour MACD’s are going in the same direction. This will mean a lot less trades but the ones you do take are likely to be profitable. (Agreement of the two MACD’s is used in conjunction with other indicators, not by itself.)

MACD on the 1 hour chart is particularly powerful. If you want to stay out of trouble and avoid trades you might later regret, NEVER trade against the direction of the 1 hour MACD. To do otherwise is not necessarily foolhardy if you know what you are doing.

But for the newer, less experienced trader, only trading long when MACD has crossed up, or short when MACD has crossed down on the hourly chart when your other favorite indicators line up, will make for a higher success rate with your Forex strategy. It will also save you much anxiety and heartache!

To see the above information presented graphically, follow the link in the Resource Box.

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Filed Under: Forex Strategies Tagged With: Anxiety, Forex, Indicator, MACD, Save, Strategy

Forex Strategy- A combination of indicators and price patterns for the derivation of tradeable signals

September 11, 2011 By thsmartm 8 Comments

FOREX (or FX as a short abbreviation) is a global currency exc
hange market where foreign currencies from all over the world are bought and sold for profit.
Current Forex trading system represents a well thought and very simple combination of indicators. Knowing what signal to look for with each indicator, provides a strong tip for good entries and exits.

Scalping Strategy:

While following the scalping trading strategy, a trader makes numerous trades in a single day, sometimes even hundred. But, he does not hold on to them for long, instead he exits from them if he feels that the market is not responding favorably. In order to make profits by using this strategy, a trader has to make sure that he buys a currency pair at the bid price, and later sells it off for a profit when it gains a bit. The most important thing that the trader should keep in mind while using this strategy is to exit at the right time. A forex scalper has to assess the market situation constantly by studying and making use of the one minute, five minute, as well as the hourly charts.

Margin Account:

An effective forex strategy that any trader, especially, a beginner, should learn is to use his money cautiously. One of the ways to protect the money available from getting wasted in bad investments, is to maintain a margin account. A margin account is an account in which the broker lends money to the trader, in return for an interest amount. By maintaining this account a new trader, who may not have enough cash initially, will get some additional dollars to invest and make profits with.

Invest in Currency Pairs:

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Another of the forex strategies that work, is to invest in such currency pairs, which almost always move in two different directions, as far as trading is concerned. For this the trader will have to study the various data, including charts, that are available for the previous year. A trader will have to identify two currency pairs which move in opposite directions so that if one pair goes down and makes losses, it can be covered up by the other pair that will be going up and making profits. This forex strategy helps in minimizing risks to a great extent.

Some advantages of Forex strategies:

Many spreads have reduced margin requirements, which means that you can afford to put on more positions. While the margin on an outright futures position in corn is 0, a spread trade in corn requires only 5 — 25% as much.

Each point in the spread carries the same value () as each point in the outright futures (). That means that on a 3 point favorable move in corn futures or a 3 point favorable move in the spread, you would earn 0. However, the difference in return on margin is extraordinary:
Corn futures – 0/0 = 27.8% return
Corn spread – 0/5 = 111% return
And keep in mind that you can trade 6 times as many spread contracts as you can outright futures contracts. In our example you would achieve a 24 times higher return on you margin.

You don’t have to watch a spread all day long. You do not need real-time data. The most effective way to trade spreads is using end-of-day data. Therefore, spread trading is the best way to trade if you do not want to watch or cannot watch your computer all day long (i.e. because you have a daytime job).

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