Forex Trading : Best Trading Strategy

Forex Trading : Best Trading Strategy

Forex Trading : Best Trading Strategy

One way to make desision when trading forex to buy or sell is to wait until the currency price goes very high for a certain period. the price will go high because there are too much demand on it with respect to the quote currency. when this is the case, the trader can sell it because the buying power will be reached and there will many sells for this currency.

Simillary, the trader can wait for the price to go very short. when this is the case, it will mean that the traders are selling this price with respect to the quote currency and the selling power has been reached. then the trader will buy this currency very much because there are no remaining sellers exist. this concept represents our forex trading strategy

The question now is how to determine the extreme points for the currency price on the graph. this will be monitored through techniqual indicators that can be drawn on the charts. the indicators that can be used are the pivot point analysis, the Stochastic, and the RSI. these indicators will be used for our forex trading strategy

The trader can monitor at which pivot level the price has reached. if it goes at higher level, this can be assumed as extreme point for the price, the trader tehn must check the stochastic va;ue. if it is higher than 80 percent for long time, this will be indicator that the currency is overbought and the trader can go short. the currency will go short to much at this case.

If the price goes to very low pivot level and the stochastic value is lower than 20 percent for long time, this will be indicator of oversold condition where the price will go high too much. the trader can buy then that currency.

As a confirmation, the trader should exist an indicator called RSI. from the above indicators, the trader knows that there will be price reverse but cannot determine at which point he can buy or sell. this is because when the price is at overbought, it may continue to go high further for a short time and the trader cannot enter the trade once he see it in overbought. the same is true when the price is at oversold condition.

To determine the entry point for the trade, the trader must check the RSI. if is is higher than 50 percent, he can enter the trade with buying the currency. this will be also when the stochasic is above than 20 percent. also the trader cam sell the currency when the RSI is lower than 50 percent and the stochastic is below 80 perent

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