Translated from Russian by Google Translate
2 Сентябрь 2009

Forex Trading Systems. Classification

Trading on the forex market and not used in this forex trading system simply means that you miss the opportunity to divest itself of the routine work that can be performed automatically.


All forex trading systems are a set of rules and methods based on these actions, which enable traders to receive signals to buy or sell currencies.

Current forex trading system to its rapid spread required development of computer technologies. That spurred recent interest in the development of modern systems. And today, more and more people are involved in their use.

All forex trading systems are based on the use of technical elements. In most cases, using moving averages, stochastics and RSI. Using these elements can confirm or refute the received signals. Quite often, these elements are used together in order to get the best result. Also worth knowing that all forex trading system is optimized. This process represents a fit of the parameters of the trading system of indicators and oscillators.

The major advantage that forex trading system is the lack of human factors. That emotions often become a barrier to successful trading. If our previous transaction was unsuccessful, it is clear that the next time we will experience a strong emotion, opening a new deal. Forex Trading Systems make it possible to get rid of psychological pressure, because they are unlikely to survive, if our previous transaction was unsuccessful.

Industry development of trading systems has led to the emergence of automated systems. These forex trading system allows complete control over trade without the presence of the trader. But one of the most significant problems that exist in a given time - is the possibility of prediction. And even if the trading system has been thoroughly tested, it still is unlikely to be able to predict future developments.

This was the introduction, and now turn to the varieties of systems. They are four:

1. Trading system based on breakouts
2. Trading systems based on trade against breaches
3. Trading systems based on trend-following
4. Counter-trend trading systems forex

trading system based on breakouts

All forex trading systems, which are based on the use of breakthrough work in most cases for orders. Meaning such that there is a certain price range. Price varies within this range. But this can not last forever and once the price breaks through one of the boundaries of the range. Above and below the range exhibited protective order. The expectation is that if the price breaks through one of the boundaries of the range, it will continue to move in that direction. That is, the idea is based on the assumption that there is a certain momentum, which is given a price when you move.

Prices may vary in the range, then reaches a new maximum or minimum. Now she is out of the old range and is based on the assumption that the momentum will be enough to enter the market and continue to move in the direction of the pulse.

- based trading system to trade against breakouts

These forex trading systems are the antithesis of systems described above. Their essence lies in the fact that we are waiting for a breakthrough. Traders who trade on the method based on breakouts, are in the market. And our task in this case, wait for the rollback and to enter the market at the beginning.

Trading systems based on trend-following

As the name implies the type of trading systems, the main idea in this case - is a trend following. We analyze the market for the presence of pronounced movement, and follow the trend.

By the way, the most prominent proponent of this strategy - Richard Dennis. Opinion of Richard is such that anyone can reach the top of trade, if it can expand the analysis on a clear system of rules and will unswervingly adhere to them. But Dennis was an opponent - Bill Eckhardt, also a trader and business partner Richard. He believed that traders need to be born.

Between them into an argument, during which they decided that Richard gather a group of inexperienced students and will train them on their technique, after which they will be given a real account, to ensure that they were able to show whether the avails of such training. A group of students called «Turtle». Such a title they have received, because associated with Dennis with tortoise farm, which was in Singapore. After training, when members of the group «Turtle» began to trade on live account, they showed 80% of annual profits, that is, Richard has won this argument.

By the way, about Richard Dennis, in his book «Market Wizards» referred to the famous classic - Jack Schwager. This book and to this day remains the world’s best-seller in the trade.

Counter-trend trading systems forex

This type of trading systems based on the ability to determine the point where the price will unfold.

And finally I will say that it is necessary first to develop their own forex trading system.

1. First of all, you need high-quality stream of actual data. That is, the latest information and developments in the world. The fact that many trade-analytical platform broadcast news, but with a delay. Therefore, for the timely information will have to pay.

2. Oh, and second, that you need - is to determine the software that you use. By the way, if you have a programming language, such as, for example, C + + or MS PowerBasic, then we can consider the option of creating your own basic program for analysis and data collection. Otherwise will have to choose the basic software complexes.