forex strategy for trading in 2013 | Access 2 Knowledge

In 2013 there will be a lot of discussion on where to invest with the current state of many of the world financial markets. While I have been more conservative with my investments going the way of mutual funds and international stock portfolios I have started to look at the possibilities of trading in Forex Exchange through partners like eToro. I did some research and found this basic forex strategy for trading in 2013. Please take a moment to look through the simple suggestions and most of all remember to only invest funds that are able to walk away from. You can find fundamental forex strategy guides on various sites and you will also find a host of videos that are straight forward.

 

 

 

 

So with all of this in mind, what are some trading strategies that work? Trend following, or buying strength and selling weakness, is a system which aims to gain from buying when you see that the market is high and selling during up trends when it is even higher. Then, you sell during down trends when the market is low and buy back again when it’s even lower. You’ll see their best performances on the markets that also trend well, and markets that are mostly driven by macro-economic basics like the forex market usually have the cleanest trend, plus last the longest, so they are therefore perfect for trend following. A good trend following system is generally a long-term trading system which has good trades that last for several months or more.

Another trade strategy that can work is buying low and selling high. This strategy usually works good with stocks and shares, and especially on indexes like the FTSE 100, Dow Jones, and the S&P 500. This strategy is many times known as buying value, and it usually works because of the effects of resistance and support. Investors and speculators normally wait for the prices to go back slightly before they buy, and then they look to sell at the recent highs. Investors will many times hold onto a good stock after they own them. This kind of behaviour from speculators makes a series of peaks and dips which make significant levels of resistance and support to emerge. This is especially true with psychologically significant numbers on the Dow Jones. Many times when the market is falling or rising towards a specific round number, you’ll usually see it reach that number before bouncing back again.

Trading momentum, or getting in on a side of a big movement is another successful trading strategy. If you are interested in trading using the momentum on the GBP/USD currency pair, this is a good trading system to experiment with. The rules for it include entering in the direction of a daily movement at the end of a day when the movement for the day has been larger than any other movement over the last ten days, then exit two days later using a time-based exit. A long, or up movement is identified when the price is closing higher than when it opened, and a short or down movement is identified when the closing price is lower than at opening. For an up day the movement size is figured out as the difference between the day’s closing price and low. With a down day, the movement size is figured out as the difference between the day’s closing price and the high.

This is one of the simplest, yet most effective ways to trade by buying breakouts on the chart to new highs, and selling to new lows. Most traders aren’t able to do this because they assume they have missed a bit of the move and then want to wait for a pullback, but with strong moves, this won’t ever happen, and then they are not in on the thousands of dollars they’ll be watching piling up. If you focus instead on the valid breakouts that are long term and your entries are timed with some of the momentum indicators, you stand to make a lot of money. Using only levels that are considered important by the market is key in this strategy.

One of the simplest and best money-makers, this strategy was made by the trading legend, Richard Donchian. This will ensure that you get in on each and every big forex trend. It is a system which is completely mechanical, and it has only one rule – you buy a new, four week calendar high, and then sell a new four week calendar low, then maintain your position in the market at all times. That is all you have to do, but if you want to you can add filters so you can smooth the equity curve….More at Forex Trading Strategies That Work

 

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Finance and Credit | December 31, 2012

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forex strategy for trading in 2013

Trend Following

Buying Low and Selling High

Trading Momentum

Long Term Breakout Trading

The Four Week Rule

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