I have been trading Forex as my main income source over 7 years now and have found diverse Forex trading systems and strategies.
Subsequent to many trials and errors I've come to the view that simplicity is key, therefore I have reduced my trading into 3 categories:
1. Forex news trading - this means utilizing the volatility surrounding economic announcements such as Non Farm Payrolls, GDP and others. For this I use software that relays the news as it happens and can actually hit the sell or Buy buttons. Sometimes your order will not be executed so it is possible to enter on a reversal, based on the news direction.
2. My own Forex trading methods and strategies, these fundamentally come down to 2 basic methods:
2.1. Selling resistance and buying support, based on ascertained pivot points, Fibonacci numbers and trend lines.
2.2. Aggressive scalps which involve trading for 2-4 points and minimizing risk. This requires some training, but once mastered it can be easy to make money .
3. External Forex Trading systems - there are many systems for sale and most of them are ineffective, written by Internet marketers for the sole purpose of making money for the system vendor. These systems are a complete waste of time but the sales pitch is professional. I have found several that work well and balance my own trading techniques.
Timing and time in Day Trading
It is highly important to understand the period that you choose to execute trades in and grasp what you potentially expect at that time of day. This differs from instrument to instrument, so it is important to understand market behavior for your trading vehicles. I ordinarily trade only 4 instruments; the DAX, Euro, Japanese Yen and the GBP/USD, and I am pretty familiar with their behavioral patterns in the trading day.
Other trading vehicles differ dramatically and I will deal in them (I do irregularly trade WTI, Nat Gas, and other currencies) after I've studied their time related behavior. Most of my trades beside the DAX and GBP/USD are figures related and of course, when figures are made public a different volatility exists which is ordinarily out of the usual patterns.
The prime time to execute trades in the DAX (German Index, and moves in tandem with the DOW mostly) is near the London open at 08:00 (03:00 EST), as the open usually brings a large rush in orders and it's easy to scalp. From time to time the scalp will turn into a longer term trade, if a trend ensues, however it is sometimes possible to achieve a gain of 20 - 40 points in the first half hour of trading. As my daily target is 30 points and it is often achieved within 30 minutes, I can then relax and look for great set ups that will not risk the gain.
A few of my fellow traders will stop trading then and do something else. It certainly gives one plenty of time, but those 30 minutes require intense concentration.
If you need more information please review my blog by clicking the link.
The blog also contains live trade examples and videos.
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