A possible Forex trading strategy is to execute your trades based on economic fundamentals and/or technical factors. These factors typically include charts, mathematical analyses, support and resistance levels, and trend lines.
Forex fundamentalists anticipate price movements by analyzing and interpreting a wide variety of economic information, including government-issued changes, news, rumors, and reports. Unexpected events often cause the most significant price movements. For example, a central bank raising domestic interest rates, the outcome of a political election, or even an act of war. Normally the expectation of the news event drives the market more than the event itself.
From a purely technical perspective, there are many approaches to identifying buy/sell levels in the Forex market. Unfortunately a great number of them are unreliable. Those approaches include methodologies that utilize Fibonacci numbers and ratios, Gann concepts, moving averages, bollinger band scalping strategy, and trend lines. These strategies assume that the market will repeat past behavior and experience. Additionally they oftne use fixed intervals for inputs, which creates yet another dilemma.
The old maxim: “A study of the past does not tell you anything about the future.”
Watching price movement without having a strategy to guide you will leave you directionless. You should watch Forex prices in relation to points-of-reference (a pivot point in combination with buy/sell levels). It is perhaps the only way of knowing whether the market is moving closer to, or further away, from a particular point. It also helps you develop a feel for the market, once you put your position on. Your entry price will take on a whole new meaning, as you track it in relation to these points-of-reference.
When watching price action, you will want to know three things: in what direction, how far, and how fast. To do this measurement, you will need only observe current price in relation to what we call the pivot point.
A great Forex trading system for you to consider is offered by Andreas Kirchberger. His software system generates all the buy/sell signals for you automatically. All you have to do is pull the trigger, and relax. The best part (in my opinion) is that there is only one small one time fee and you are not tied to any complex trading patterns or charts. There are some nice video’s too that you can watch on the site above to get you started.