Introduction to Simple System FOREX Trading
Tip: Performance is not an issue here; learning is the focus.
Fundamentals almost certainly drive the long-term trends of currencies, but trading is a short-term affair.
Ergo, I strongly recommend the new trader develop a simple technical analysis toolbox to get started trading currencies. You may add to the toolbox later or make adjustments. Or perhaps you will find your approach in the Goodman Method of Part 5 -- or in any number of other technical trading approaches. Use the techniques of News Trading. as your fundamental analysis adjunct.
At the outset, it is important to keep your tools balanced, and your method simple. Do not select four tools effective in trading markets and only one that works in trending markets. This implies that you know what an indicator, charting technique, or other technical tool really does. Begin your FOREX career by keeping it simple.
Of the three components to trading, trading techniques get the most publicity -- perhaps because they are easier to communicate. Traders have hundreds of tools to trade, even though most are variations of a few general types. The composition of toolboxes and trading methods also varies enormously from trader to trader. But almost all successful traders share the same psychological attributes and basic money-management rules.
By Michael Duane Archer