What are the best Forex trading strategies? Are trading systems and strategies based on indicators the best ones to use? Or, should you look into more "natural" trading strategies that make use of classic technical price patterns in the market? This article will take a look at three different Forex trading strategies and discuss the advantages and disadvantages of each.
• Forex trading indicator systems and strategies
Indicators are popular among many Forex traders. There are many different indicators you can choose from, many of them are simply "oscillators" that show over-bought and over-sold conditions, examples of these are the stochastic indicator and the RSI indicator. Other indicators attempt to show trends, like moving averages and Bollinger bands, some indicators like MACD, claim to show both. The advantages of indicators like these and others is that they give traders something "concrete" to build a trading system around and indicators like moving averages can help to "smooth" out the overall market picture. However, the big disadvantage is that they are inflexible and often fire off many false signals as market conditions change. Also, it can be very confusing to figure out which indicators work best together and which do not, usually what ends up happening is just a lot of confusion.
• Forex software trading systems
Forex software is quickly gaining popularity on the internet and even on some late-night T.V. infomercials. However, a word of caution should be said about these systems. They often make extremely bold claims of fully automating the trading process and allowing you to simply click your mouse and make tons of money. These software "black box" systems generally sound too good to be true and they usually are. You should never try to learn from something that claims to completely mechanize the trading process simply because trading is something that cannot be mechanized. Every great trader relies on their discretionary trading sense to some degree, and this is something you must develop from screen time and effort, not from buying some over-hyped trading system.
• Classic technical price patterns
The last forex trading strategy we will review is "classic" technical price pattern trading. These include patterns like triangles, head and shoulders, candlestick reversal bars such as shooting stars or pin bar, and many others. Learning to trade off of this "core" data of the market is something that every trader needs to learn, no matter what trading strategy they end up using. One person who teaches classic price pattern trading is Nial Fuller, you can find out more about him by checking out some nial fuller reviews.
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