Forex online is popular. In the last years the software trading Forex online is simplified. It had made Forex trading easier and the online trading platforms more user-friendly. The traders are most interested in trading the currency pairs EURUSD, UDSJYP and GPBUSD.
In this article is the tropic how to trade Forex. The focus will be on a trading strategy in a trending market and a trading strategy in a fading market. They are just two strategies but there are several others.
The market situation is either trendy or fading. A trending market is a market where the prices are moving up and down. When the prices are on its way up the traders buy and when the market is on its way down they sell. A fading market is a market where the market has some extreme move in the prices. When the price is at its extreme high the traders sell and when the price is at its extreme low they buy.
In a trending market is the simple moving rates a useful trading strategy. The moving rates are the average price in a given point over a time period. Moving average is the latest average in the same time measure. If the time period is too long the average would not show the changes in the trends. It is recommended to use a short period as 5 to 10 days to solve this problem.
When traders use this strategy they buy the prices move above the moving average and sell when the prices move below the moving average.
In a fading market is the Bolling bands a useful strategy. The Bolling Bands consist of a mowing average and an upper standard deviation and lower standard deviation. The Bolling Bands consist of 95 percent of the closing prices. The most used moving average is the 21-bar.
In a graph the moving average will be a line that moves at an average with the prices. The upper standard deviation moves with the highest prices and the lower standard deviation moves with the lowest prices.
When the traders use the Bolling bands they buy when the price is below the lower standard directives and sell when the price is above the upper standard deviations.
In this article is illustrated how to trade in a trendy and fading market. This article has only illustrated one strategy for each market situation. It is recommended traders use more than one strategy when they trade Forex online.