It is important to remember that the best forex trading system does not exist, as such. If it did everyone would be using it and everyone would be rich but clearly that is not the case. The best forex trading system works on an individual basis. When I mention the best forex trading system I mean the best forex trading for the individual. Each trader has a different system and developing a preferred system is the key to success. However, it must also be remembered that no system works 100% of the time and the most important aspect of a trading system or strategy is that is works more often than it fails.
In order to create the best forex trading system for you, you must first consider the two facets of analysis; technical and fundamental. The technical analysis in forex markets is much the same as it is in equity markets except it is commonly believed that there are particular indicators which work especially well in the forex market. Fibonacci retracements and extensions are often a popular indicator used to create the best forex trading system. Mystery still surrounds the Fibonacci retracements because they help predict key lines of support and resistance but the math used to do so is seemingly unrelated to trading. Regardless of the method, the results work frequently and this is now largely attributed to traders’ behavior creating a self fulfilling prophecy. Fibonacci retracements are highly recommended when creating the best forex trading system for you because they can predict price highs, lows and rebounds.
Another part of technical analysis frequently combined with Fibonacci retracements are Elliot Waves. These help predict the movement of the market based on rhythm. The basic Elliot Wave principle is that once the market moves up in five waves it will move down in three and combined with Fibonacci retracements these two can provide some powerful technical analysis suitable for the best forex trading system.
The fundamental analysis necessary to help create the best forex trading system suited to you is also essential. Fundamental analysis is generally complicated and is concerned with the release of news affecting the forex market. In relation to the forex market it is worth analyzing news released on indicators such as durable goods, the consumer price index and the purchasing manager’s index. Fundamental analysis is ideally used for long term strategies although some use it for short term.
Ideally the best forex trading system should comprise a combination of both fundamental and technical analysis and this is often the approach expert traders take. This allows for a broader analysis that encompasses all factors that can affect the forex market.
Comments (No)