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Trend-following systems require a particular mindset, because of the long duration—during which time profits can disappear as the market swings—these trades can be more psychologically demanding. When markets are volatile, trends will tend to be more disguised and price swings will be greater. Therefore, a trend-following system is the best trading strategy for Forex markets that are quiet and trending.
This article outlines 8 types of forex strategies with practical trading examples. When considering a trading strategy to pursue, it can be useful to compare how much time investment is required behind the monitor, the risk-reward ratio and regularity of total trading opportunities. Each trading strategy will appeal to different traders depending on personal attributes. Matching trading personality with the appropriate strategy will ultimately allow traders to take the first step in the right direction.
When trading forex, you always speculate on whether the price of the base currency will rise or fall against the counter currency. So in AUD/USD if you think AUD will rise against USD, you go long (buy) the currency pair. Alternatively, if you think AUD will fall against USD (or that USD will rise against AUD), you go short (sell) the currency pair.
When trading forex, you always speculate on whether the price of the base currency will rise or fall against the counter currency. So in AUD/USD if you think AUD will rise against USD, you go long (buy) the currency pair. Alternatively, if you think AUD will fall against USD (or that USD will rise against AUD), you go short (sell) the currency pair.
Within price action, there is range, trend, day, scalping, swing and position trading. These strategies adhere to different forms of trading requirements which will be outlined in detail below. The examples show varying techniques to trade these strategies to show just how diverse trading can be, along with a variety of bespoke options for traders to choose from.

Using the (CCI) as a tool to time entries, notice how each time CCI dipped below -100 (highlighted in blue), prices responded with a rally. Not all trades will work out this way, but because the trend is being followed, each dip caused more buyers to come into the market and push prices higher. In conclusion, identifying a strong trend is important for a fruitful trend trading strategy.
Foreign exchange (forex) or FX trading involves trading the prices of global currencies, and at City Index it is possible to trade on the prices of a huge range of global currencies. Currency trading allows you to speculate on the movement of one currency against another, and is traded in pairs, for example the Euro against the US Dollar (EUR/USD).
There is an additional rule for trading when the market state is more favourable to the system. This rule is designed to filter out breakouts that go against the long-term trend. In short, you look at the 25-day moving average (MA) and the 300-day moving average. The direction of the shorter moving average determines the direction that is permitted. This rule states that you can only go:
The main categories of forex strategies used by traders include: Fundamental Strategies, Technical Strategies and Popular Strategies. Fundamental forex trading strategies are dependent on the fundamental economic indicators of a nation and other political events that happen in a nation. Technical forex trading strategies rely on the statistical and mathematical models of the currency prices and the analysis thereof. Popular trading strategies are always a combination of the fundamental and technical analyses.
Fair Value strategy made use of in various financial markets. In the forex market, the fair value of a currency is determined based on the economic situation in a country. In order to use this forex strategy, traders must have an understanding about a few basic related to the economy, especially the GDP growth of the two economies whose currencies they plan to buy and sell. Other aspects to be considered include the unemployment rate and the inflation data.
If traders are positive on the prospects for the Yen, they would expect the number on the right to go down – i.e. the Yen would be getting stronger against the Dollar. Traders would be buying less Yen with a Dollar as the Yen got stronger. Similarly, if the Yen was expected to weaken, forex traders would expect the Yen number to go up, reflecting the fact that the dollar could buy more yen.
GAIN Capital recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. 
All data are displayed in chronological order, divided by day. Released data are marked with a tick () under the “time left” column. A light grey horizontal line shows you where we stand at the moment and below that line go all upcoming data. Time left before next release is indicated so you quickly grasp when this is coming. When a new data is released, the calendar page is automatically refreshed so you do not miss it. If you want, you can enable a sound notification for all releases.
Counter-trend strategies rely on the fact that most breakouts do not develop into long-term trends. Therefore, a trader using such a strategy seeks to gain an edge from the tendency of prices to bounce off previously established highs and lows. On paper, counter-trend strategies are the best Forex trading strategies for building confidence, because they have a high success ratio.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
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