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The classification of trading systems Forex
Any successful and experienced trader has their own Forex trading systems or strategies, which he uses constantly when working on the Forex market. If we consider the concept of systems of Forex trading from this position, the trading strategies represent a set of regulatory rules, based on which traders make the decision to open or close a position.
As a rule, any trading system and the rules of which it is composed, covers multiple aspects of trading, and uses a large part of the analysis of the currency market (the indicator, technical, fundamental, candle, etc.). In addition Forex trading systems can cover such details as the start time, the psychology of market participants, risk management methods, and other concepts.
All trading systems are divided into two major classes: automatic and logical. Automated or mechanical Forex trading systems are software tools that contain the set of certain rules that work offline and do not require the participation of a trader. The logical trading system is the opposite of automatic, and, accordingly, all the rules in them are interpreted and executed directly by the trader.
Regardless of class, trading strategies can be divided into several types:
• Trend trading – all transactions are made solely at the direction of the main trend, which is determined by indicators or technical analysis;
• Counter-trend trading – operations are performed against the direction of the trend, which often not only leads to large profits, but also to high risks;
• Trading ranges – used in cases when the price for a long period of time is within one range;
• Trade breakout of the range – the main goal is getting into the beginning of a larger trend, after a long stagnation the price range and purchasing a new impetus to the movement;
• The corrections – is used to open positions at a time when the market has already formed the basic direction of price movement.
The main reasons for using Forex trading systems, there are both purely psychological and mathematical reasons. From the point of view of psychology, the trading system with a strict set of certain rules significantly relieves the trader, which greatly facilitates making the right decisions. From the point of view of simple maths, well established trading system has the best chances of obtaining permanent income in comparison with the play on emotions.
|Category: Forex | Added by: (29.10.2017)