Forex Trading Strategy

AAA

DEFINITION of 'Forex Trading Strategy'

A set of analyses that a forex day trader uses to determine whether to buy or sell a currency pair at any given time. Forex trading strategies can be based on technical analysis charting tools or fundamental, news-based events. The day trader's currency trading strategy is usually made up of a multitude of signals, which trigger buy or sell decisions. Forex trading strategies are available for free, for a fee or are developed by the traders themselves.

INVESTOPEDIA EXPLAINS 'Forex Trading Strategy'

Forex trading strategies can be either manual or automated. A manual system involves a trader sitting at the computer screen, looking for signals and interpreting whether to buy or sell. An automated trading system involves the trader "teaching" the software what signals to look for and how to interpret them. It is thought that automated trading takes out the human element of psychology that is detrimental to a lot of traders.

Both automated and manual day trading strategies are available for purchase over the internet. It is important to note that there is no such thing as the "holy grail" of trading systems. If the system was a perfect money maker, the seller would not want to share it.

VIDEO

RELATED TERMS
  1. Manual Trader

    A trader who manually enters trades into a trading system without ...
  2. Cable

    Slang used among forex traders referring to the exchange rate ...
  3. Forex - FX

    The market in which currencies are traded. The forex market is ...
  4. USD

    In currencies, this is the abbreviation for the U.S. dollar. ...
  5. Quote Currency

    The second currency quoted in a currency pair in forex. In a ...
  6. Base Currency

    The first currency quoted in a currency pair on forex. It is ...
Related Articles
  1. A Primer On The Forex Market
    Options & Futures

    A Primer On The Forex Market

  2. Top Reasons Forex Traders Fail
    Forex Education

    Top Reasons Forex Traders Fail

  3. Forex Courses For Beginners
    Forex Education

    Forex Courses For Beginners

  4. Getting Started In Forex Options
    Options & Futures

    Getting Started In Forex Options

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center