Trading Strategies

Forex Trading Strategies

The foreign exchange markets are ever-evolving and capable of shifting 180 degrees in milliseconds. In order to stay on the competitive lead lap, your approach to the market must be proactive. To learn how implementing strong forex trading strategies can give you an edge, check out our comprehensive collection of online resources.

Market Hours

Forex Trading Strategies Explained

The quintessential function of all forex trading strategies is to generate profits through the buying and selling of currency pairs. This task is accomplished by putting capital into harm’s way with the expectation of being financially rewarded.

Finding a strategic framework that is tailor-made for your individual situation is a critical part of sustaining consistent, disciplined trading. It must properly balance resources and objectives; if not, adopting another approach to the markets will be necessary.

The Ins and Outs of Currency Trading

Three Components Of Strong Trading Strategies

Strong forex trading strategies ensure that positive expectation trades are consistently executed and prudent risk management principles are applied. If your trading strategies don’t address trade selection, open position management, and risk exposure, then they probably aren't worth their weight in salt.

Forex Risk Management

Find Your Best Forex Strategy

When it comes to deciding which forex trading strategies are suitable for your unique situation, several considerations must be made. Among the most important are your available risk capital, time, goals and market savvy.

Your best forex strategy will align your resources and goals without conflict. After its selection, your primary job will be to apply the methodology on a daily basis.

How to Develop a Trading Plan

What Are Non-Farm Payrolls (NFP)?

Navigating the release of an official economic report is a critical aspect of successfully trading forex. Order flow and exchange rate volatilities often spike as traders act on their opinions of the report’s contents. In the event expectations are exceeded or disappointed, any number of scenarios become possible. It is up to the trader to deal with each situation in measured, timely fashion.

When it comes to addressing U.S. employment, Non-Farm Payrolls (NFP) is the go-to metric for currency traders around the globe. NFP counts the number of jobs gained in the U.S. that are not directly related to agriculture and farms. It is released on the first Friday of each month and is one of the most watched economic reports on the forex calendar.

Learn More About NFPs

Trading The NFP V-Shaped Reversal

One of the staples of any NFP report is market volatility. Price action has a tendency to become super-charged following its release, as trader participation and order flow increases exponentially. Subsequently, wild swings in exchange rates can occur, which heightens risk and creates opportunity.

Although there are many ways of trading NFP, the V-Shaped Reversal is worth investigating. Often, a strong NFP report initially favors the USD before taking an opposing course for the remainder of the session. Accordingly, the V-Shaped Reversal strategy can produce beneficial risk vs reward tradeoffs.

Learn More About Trading The NFP V-Shaped Reversal

Profiting From Opening Range Breakouts

Perhaps the greatest benefit of trading forex is that the market is open 24 hours a day, 5 days a week. The extended business hours include the London, New York, Australia and Tokyo sessions, and this gives traders from around the globe access to each venue. While the forex is technically open on a 24/5 basis, the market isn't always active.

Due to a wide variety of factors, participation rates and volatility vary greatly throughout each session. To avoid the pitfalls of slow markets, it can be beneficial to focus trading efforts upon consistently active periods. The Opening Range Breakout Strategy is one type of strategy that does exactly that in a measured, concise approach.

Read More About The Opening Range Breakout Strategy

How Do Commodity Correlations Work?

The exploration, extraction and manufacture of raw-earth materials has a profound impact on the global monetary system. From precious metals to energy products, commodity values regularly influence the wealth and currencies of many countries. Because of this relationship, certain forex pairings have time-tested correlations to the pricing of specific commodities.

Commodity dollars, casually referred to as "comdolls", are currencies that are valued in relation to an underlying raw material. The AUD/USD, USD/CAD and USD/NOK are examples of commodity dollars correlated with silver and crude oil. While the evolving commodity/currency relationship is not infallible, historical tendencies are best respected when trading sensitive forex pairs.

Understanding Commodity Correlations

What Is A Tweezer Candlestick Formation?

Since their introduction to the Western world in the late 20th century, Japanese candlesticks have exploded in popularity among forex traders. Featuring a unique presentation, candlestick charting techniques are extremely useful in technical analysis, specifically pattern recognition.

One candlestick pattern that is frequently referenced by technical traders is the Tweezer formation. A Tweezer develops when two consecutive candlesticks have equal or nearly equal high or low values. The result is a visual cue that can act as a leading indicator of a periodic trend reversal. Tweezer patterns are common to short-time frames and may be utilized as a valuable part of almost any trading strategy.

Learn More About Tweezers

Basics Of Gold Trading

Historically viewed as the ultimate safe-haven asset, gold is traded in many ways around the globe. Whether held in the physical form or traded on the forex as the XAU/USD pair, gold is a favored means of pursuing almost any financial goal. For those interested in protecting wealth, growing market share, or seeking a temporary reprieve from uncertainty, bullion is always popular.

Even though gold is a truly unique financial instrument, it lends itself well to active trading. Its consistent liquidity and volatility are attractive to traders seeking a viable hedging tool or speculative opportunity. As the saying goes, "Gold has always been worth something!" For active forex traders, this is especially true, because trading unleveraged XAU/USD pairing opens the door to numerous possibilities.

Learn More About Trading Gold

Unlock The Secrets Of Trading Gold

Like other markets and products, the gold trade is filled with nuance and there are many issues worth examining before jumping in with both feet. A few of the key pieces to gold’s puzzle include correlations to the USD, fundamental valuation factors and inherent volatility.

If you are going to engage global bullion, it's a good idea to get up to speed on the vital underpinnings of the market. Learning what trading gold is all about and a few gold-specific strategies are great ways to begin your endeavor into the marketplace.

Learn The Key Elements Of Trading Gold

Consult An Expert's Forex Forecast

Even the finest traders go through rough patches. Ultimately, dealing with adversity is key driver of any forex participant’s success.

A great way to weather trying times and develop as a trader is to consult an expert forex forecast. To learn more, check out the complementary market analysis portal available at FOREX.com. Featuring the latest research, live trading sessions and analysis of key geopolitical events, it’s filled with invaluable currency market insights.


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