From reviewing a number of forex currency trading systems and methodologies available online, I have found that the majority are based on having a number of indicators pointing in the same direction giving you a what’s known as a ‘confluence’ of indicators which is much more likely to be an accurate signal.
However, it is not just any combination of technical/fundamental indicators. The well thought out systems available on the internet makes use of different types of indicators. For example they might first decide to observe some type of resistance level such as a fibonacci retracement level, a pivot point, or a double bottom. This provides the initial support area. From here they may look to price action, for example they may decide that their system requires a certain candlestick formation to occurm such as an evening star, or morning star formation. Alternatively, they may just wait for any candlestick reversal signal to occur around that area, to take the trade.
Some traders would be happy to take the trade with just those two criteria. Others may require additional indication that a change in trend is about to occur. For example, they may use a bearish Stochastic, or MACD signal to confirm the change in trend.
Another less used method of trading might be, to incorporate the use of support and resistance type indicators as mentioned above, they may decide to make use of cycles. I wont go too far into the subject of trading using cycles since it would go off topic, and my aim here is to introduce you to the possibilities, and what other traders are using in there forex trading systems. However, one method of cyclic analysis comes to mind, it’s called the Delta Phenomenon.
The Delta Phenomenon can tell you with great accuracy, WHEN in time a move is about to occur, as well as the DIRECTION. However, to increase your probabilities of being correct you should refer to the Elliott Wave Principle. The Wave Principle basically can give you the FORM of the wave, as well as the ability to predict its DIRECTION. So if you had indications from both the Elliott Wave Principle and Delta that a change in trend to the upside was about to occur, wouldn't you feel more confident in taking the trade? Of all the methods and systems I have reviewed and examined, I have never come across a methodology that made sense as much as the method I have briefly described above involving the use of both Delta and the Wave Principle.
Of course it is essential that you keep in mind other factors such as money management, and expectancy when developing and implementing your own forex trading system.
Conclusion
There is literally an endless mix of technical analysis techniques that you could use in your forex currency trading system. The one you choose largely depends on what you are comfortable with. Some prefer not to use market timing techniques that take some time to learn and implement, however if you have the time and patience to learn analysis techniques such as the Elliott Wave Principle, and the Delta Phenomenon, it might just be the ticket to your success.
For some time now the year end statistics have shown that automated trading systems trading stock on the New York Stock Exchange has increased in volume over the pervious year and the trend now is expanding to the Foreign Exchange Markets (Forex of FX.) In order to optimize your results trading on the currency markets it is essential in today's ever increasing competitive field that you utilize all the tools at your disposal.
A complete knowledge of all the various aspects of currency trading is no longer sufficient to maintain your status as a successful trader. Especially, when your competition has already taken the next step, which is an automated FX trading systems.
There are numerous instances where a retail trader has hastily entered into the currency markets after taking a Forex trading course and retreated form the market just as quickly as they entered. They then contemplate what caused them to fail and one of the factors was they were always behind the trading curve. The importance of an automated trading system when entering the currency markets can not be understated. There are numerous types of trading systems on the market today. One software system might focus on trends, the next on signals and another could be based on specific strategies determined by the developers of the currency trading platform and programmed into the software.
Many currency trading systems incorporate state-of-the-art Forex software that makes winning trades with pinpoint preciseness on Auto Pilot and are able to make victorious trades over ninety per cent of the time. The problem with some of those systems is that the winning trades profits can be often on the small side and the one losing trade in ten they make can wipe out the profits of the previous nine winning trades. At the other end of the extreme are systems that make winning trades less than fifty per cent of the time, but when they hit a profitable trade it is often a large one and wipes out the loses in your account from the previous losing trades.
Hopefully, if your this far along in the foreign exchange markets that you are contemplating purchasing a Forex trading system you are already an experienced trader ready to make the next step in the evolution process or if your just beginning to trade the currency markets you have all ready taken one of the exceptional currency trading courses that are available today. Regardless of the situation, once you decide on the Forex trading software you will purchase that you realize you still have a long learning curve in front of you regarding the software.
The purchase of the software is just the first step. It is just essential that before utilizing it with a real money account you are able to make winning trades consistently over a minimum of a month's period time using a demo account. Only at that time are you ready to use your new Forex trading platform at the next level with a real money account.
When you start researching the market on FX Trading Systems you are going to find that there are literally hundreds of them on the market today. So which is the best? Which is going to make me the most money over the shortest period of time? Which is going to make me money consistently over an extended period? The answer is that once you have eliminated ninety five per cent of the platforms that are not first-class, all the rest will do what you require depending on your trading profile and your risk tolerance level. In other words each of the distinguished trading systems approaches the situation a little bit differently. Your purchase of the product needs to be based on your trading personality and which product best suits that personality. But, NONE of the systems will perform profitable for you if you do not spend time learning to operate the software and programming your specific trading personality into the system.
Both Bret Freak & William R Alheim, Jr. are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Bret Freak has sinced written about articles on various topics from Forex Guide, Forex Guide and Forex Trading Forex. If you are interested in learning a that has already been developed, visit trading-forex-online.com. A website where you can find i. Bret Freak's top article generates over 8100 views. to your Favourites.
William R Alheim, Jr. has sinced written about articles on various topics from Forex Guide, Forex Trading Forex and Stock. We have researched, tested & reviewed 100s of Forex Courses, Software Systems and Brokerage Firms which we only list our TOP 10 to help you .. William R Alheim, Jr.'s top article generates over 2900 views. to your Favourites.