Forex Systems
& Strategies

Which approach you take will depend on a variety of factors some of which are:

     1. Your knowledge of the Forex Industry
     2. The amount of time you have available to trade
     3. The amount of capital you have to invest.
     4. Your risk tolerances
     5. Your personal preferences

Some of the more prominent approaches are:

1.  Forex Scalping Systems

A popular approach these days seems to be the scalping approach.  With this technique, traders trade off of very small time frames, often as low as fifteen and five minute charts.  They are looking for quick profits of 5-10 PIPS per trade.  They typically make dozens of trades per day and are watching the markets and charts intensely for many hours per day.  This is essentially a full-time operation.  This can be a very profitable strategy, however, there is a price to pay in terms of time invested and risk.

2.  Forex Day Trading Systems

Rather than looking for small profit targets of 5-10 PIPS, day traders seek to capitalize on the daily price fluctuations that occur on any given currency on any given day.  It is well established that currencies have their own respective daily ranges.  These traders attempt to determine the direction of price for a given day and ride the momentum for the duration of the day.  They typically get out of all trades before the day's end.  Typical profit targets are in the neighborhood of 30-70 PIPS per trade.  They typically trade once or twice a day and usually trade off of one hour charts.  This strategy just as involved as the scalping systems, but does not necessarily require that the trader be watching the market at every moment.

3.  Forex Swing Trading Systems

One of the most popular approaches is that of swing trading.  With swing trading, the goal is to capitalize on retracements or aberrations of price action within the main trend.  Swing traders typically follow 4-hour charts and daily charts.  Their trades can last anywhere from a day or two to several days.  They typically target profits of anywhere from 100-500 PIPS per trade.  This technique is usually a less stressful technique that requires far less time and analysis.

4.  Forex Long-Term Trading Systems

Some strategies are more longer term based than others.  These systems typically involve a more substantial fundamental analysis component than the technical based shorter term approaches. Here, traders will follow the fundamentals of a particular country or currency and gauge its ability to move over time relative to other currencies.  They will then use technical analysis as a tool for order entry rather than as a signal tool.  These traders typically enter into fewer trades and seek profit targets of several hundred and perhaps thousands of pips per trade.  These systems also require far less work on a daily basis and only occasional monitoring of positions.

5.  Forex Signals

Many traders do not feel competent or confident enough to rely solely upon their own analysis and knowledge.  Others simply do not have the time to invest in learning to trade or in making sound trading decisions.  For these folks, there are signal services available wherein buy and sell signals are periodically sent alerting them to potential trade opportunities.  Typically, these signals are sent via email.  Some services offer precise entry, stop loss and exit points.  Others simply alert traders to potential upcoming trade setups.  There are all sorts of services of these type available.  Some are more reputable than others.


6.  Forex Automated Trading Systems

Forex Signals offer the trader the ability to benefit from the expertise of others whereby they get expert advice on trade setups and potential trade situations.  They still must, however, choose whether to follow the signals and then must manually execute the trades.  This means they must be sitting by their computers ready to act.

With Automated Trading Systems, the need to be sitting by the computer is completely eliminated.  Here, the trader will install a software program or script into their trading station.  This software or script then follows a proprietary algorithm to enter and exit trades.  In other words, it does the trading for you from entry to exit.  This type of system is designed for those who either have no expertise or experience necessary to trade, or who simply do not want to invest any time making their own decisions.  There are a lot of different Expert Advisors (EA's) out there for the Metatrader Platform.  Unfortunately, most of these are not sound trading solutions.  Be careful before you entrust your trading account to an automated service.

7.  Forex Managed Accounts

For those who have no knowledge of Forex trading and have no time or desire to acquire such, a Forex Managed Account may be the best solution.  There are a variety of services available whereby you will entrust your trading portfolio to an experienced fund manager who will trade your funds for you.  They will typically take a percentage of your profits as compensation.  Again, there are numerous services available.  It is imperative that you do your due diligence and thoroughly research the firm you are intending to partner with before entrusting your money.