Let’s take a look at some of the different types of strategies and systems that you can use in the Forex market.
You know the type. You’ve just read about it in one of the Forex forums out there. When the 27SMA crosses the 51EMA and the PSAR is under the price action, then the stochastic crosses all while the moon is high in the sky and, by the way – this system is only suitable for trading in the morning.
It’s obvious that these kind of trading systems are never going to work, yet so many people feel the need to try them out. Well if that’s you, good luck. You’re going to need it.
Trading systems that rely on a load of indicators all over your charts are never going to work long term. They’ve been designed by someone who happens to notice that it’s working right now on a currency pair or two, on one particular timeframe. It’s also worthwhile pointing out that these trading systems and strategies that are designed and posted in trading forums are usually the work of unprofitable traders, who are still jumping from strategy Top Trading Online Suppliers to strategy.
My advice, avoid at all costs. You’ll save yourself loads of heartache and money.
Old school technical analysis
You could try the old school technical analysis that’s been around for as long as anyone can remember. There’s ascending triangles, consolidation breakouts plus head & shoulders patterns, flag patterns and all the other patterns from technical analysis 101. Well the good news is that this stuff works. It has done for generations, and is very likely to keep working well into the future.
The hard part is that a lot of newer traders simply find this style of trading boring, or not as exciting as an indicator driven system. They feel that the more complex the system, the more likely it is to be their holy grail.
There’s a very good reason why old school technical analysis is still around, it’s because it works, and plenty of experienced profitable traders use it in their own trading.
One of the major downsides to using old school technical analysis as a trading system is that as a trading approach, it tends to be lower success rate, which a lot of people are unwilling or unable to deal with. Of course with this approach being a lower success rate, the winning trades are typically very large, which makes the system profitable.
Overall, old school technical analysis is something that you need to learn, as it complements a lot of other trading approaches, and really gives you a solid foundation in the Forex markets and beyond.
Some guru’s latest flash in the pan strategy
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