Forex Trading Strategy

The Spot FX market or “Forex” used to be limited to banks and long term investors, plus those who had masses of capital money. Trading would take place via a guy shouting what what going on on the trading floors or a “voice broker” which has gradually been replaced by automated computerised systems.

It is now actually possible for the retail investor or “home office based trader” to trade real time with the banks through the environment of a broker using computerised trading platforms which may have live desk traders placing trades either in the brokers books (95% of traders lose money so it’s in their interests not to trade for real), or for real – for the winners.

A forex trading strategy must usually comprise of two main components – technical analysis and fundamental analysis. The technical side is looking at the charts and using mathematics to reflect the movement of the market and the fundamental side requires knowing about important market-influencing economic news and announcements.