The Most Powerful Way to Trade Forex

It almost sounds cliché, but the most powerful way to trade Forex is to trade in the way that best fits you. Do you like technical indicators? If so, then a technical strategy can be built to fit your needs. Would you prefer start trading with the fundamentals? Then fundamental strategies can be built for your trading strategy.

The Most Powerful Way to Trade Forex
Realize that of all the markets, the foreign exchange markets are some of the most versatile. First and foremost, the foreign exchange markets are open longer, through one brokerage in one country, than any other market in the world. Thus, whether you seek to trade only on Monday nights, or maybe only for a few hours each morning, doing so is entirely possible.

Compare that flexibility and freedom to the stock markets where investors have only a few opportunities to trade, and all of them require that 1) they trade an entirely foreign market or 2) they trade during their normal work week. Such a schedule is not conducive to new traders, nor those who seek to work a dayjob but also profit in the financial markets in their spare time. For these kinds of traders, the foreign exchange market fits their needs perfectly.

Time Per Trade
Another important dynamic in any trading strategy is the horizon for which each trade is held. Do you want to become a day trader? Then that is very much possible with a highly-leveraged, short-term account. Or maybe instead of a day trader you want to make swing trades, those that last no longer than a month, this works as well. Finally, you might desire the opportunity to place long-term foreign exchange trades and profit on long-term, fundamental trends, which brings up a new point: an investor’s timeframe often depends on the type of trader.

A fundamental trader, for example, is more interested in the economics that back a particularly currency, and thus they may wait many months, or even a year before closing a trade. This is due primarily to the fact that economies do not fluctuate greatly in their performance overnight, and thus neither do currencies.

Technical traders, however, are generally interested only in the short term price action, and how their indicators perceive the market’s future. Thus, these traders are inclined to think short-term but high volume, and thus place more trades, but with smaller profit potential per trade, than the fundamental trader or investor.

Your Trading Platform
The most powerful way to trade Forex starts with the most powerful trading platform, especially if you rely mostly on technical indicators or very short-term, often split second charting and financial reporting.

While the gold standard for Forex trading is rapidly becoming Metatrader, a number of brokers now use their own proprietary platforms in order to execute client trades.

One big detail here is the automation possibilities that exist with each platform. Metatrader, for example, offers the ability to code unique, automated trading strategies from within the platform. However, other brokers with their own software offer often an “API” trading stream through which their clients can place trades automatically with their own client-side software, or in unison with brokerage supported software.

Often, the quality of software is what makes or breaks a trader, but keep in mind that the best software isn’t always the one with the bells and whistles. No, the best software is that which has the most bells and whistles to match your needs, with enough cleanliness and simplicity that you can enter, exit, and execute trades comfortably and without referencing additional material. Likewise it should be suited for your trading style and require very little time for each change to charting or orders. Remember, time is money.

So, while the “most powerful way to trade Forex” might not be the most glamorous way to trade Forex, it is still the most profitable way to trade Forex: make it your own!

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