February 10, 2014

Trade Forex In A Strategic, Tactical Way

Trade Forex

One way to trade forex successfully is to go on a hunt for just 1 perfect trade per week, no matter what the currency pair you are thinking of using. Here’s how you could do it. First, you pull out a daily chart of each pair that you are thinking of trading. Now, add a “Know Sure Thing” (“KST”) indicator to it. You should see the KST crossing over, at the top of its chart and at the bottom of its chart. Those are golden trade signals; pay attention! Now, layer on an “Awesome Oscillator” (which is an excellent visual gauge of momentum) and wait for the next crossover of the KST to occur. If momentum is on the upswing, launch your trade (in the direction of the crossover). If not, just be patient and wait for the next crossover (signal) to occur.
The time is rapidly drawing near when US interest rates are going to go up. This will force significant – and, potentially abrupt – currency pair pricing changes in trade forex.

Research Tactics And Strategies Before You Trade Forex

Researching the monetary policies of the world’s central banks is one of the most important – if not, the most important – things you can do before you start to trade forex. Central bank monetary policy controls interest rates, any change in which can set the forex world on fire (e. g., the Bank of Japan’s decision to embark on its own version of “QE” in early 2013, which helped propel the USD/JPY over 100.00 in short order). From an opportunistic point of view, the way to make money out of this situation is through trend-trading, particularly anything involving the long side of the US dollar. As the US Federal Reserve commences its “taper” policies, interest rates in the US are going to rise.

Putting The Best Tactics In Place To Trade Forex

In the near future, rising interest rates inside the US are going to act like a black hole in the forex universe, drawing in and consuming global capital looking for a relatively safe, higher interest rate home. This means that currency pairs like the USD/JPY and USD/CHF will – ultimately – head a lot higher. This also means that developing nations may begin to experience capital flow-related difficulties, as already evidenced by the Banco de Mexico’s September overnight interest rate cut in September 2013 and Columbia’s March 2013 target lending rate cut. Use a pair of “Bollinger Bands ®“, on a daily chart, along with Bill William’s “Awesome Oscillator”, to scope out where to “buy low” and, then, “sell high”.

Trade Forex And Reap The Rewards

When rising US interest rates start to suck in excess global liquidity, the USD/JPY is going to start to rise (again), putting pressure on the Japanese yen. This is going to cause quite a divergence in AUD/USD and AUD/JPY pricing patterns, since one pair will be denominated by a strengthening currency, while the other pair will be denominated by a weakening currency. Since it is estimated that the US Federal Reserve’s “taper” program may take up to 10 years to conclude, the AUD/JPY is facing a very bright future – as long as the Bank of Japan does not alter its currency monetary policy programs. Astute traders should watch the ascent to AUD/JPY 108.00; a breakout there would be a game changer.




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