Step 1: Fundamental Strategy:
Fundamental Strategy considers major fundamental indicators like Interest Rate and Interest Rate Bias, inflation rate, Net Domestic Product, monitory policy, Consumer price Index etc. of both the economies in a pair to determine term projection of currency pair.
Interest Rate and Interest Rate Bias:
Interest Rate is one of the major fundamental factor that influence value of currency. Difference between Federal/Central bank interest rate between two economies of paired currencies paired is one of the main factor that determines the currency rates. Probability of interest rate going up makes the currency in the pair stronger.
Step 2: Global Currency Index Strategy:
Global Currency Index strategy is Global Currency Index created by ForexMetrics.com It is a unique index which determines the unit value of the Single Global currency.
Individual Index of each currency represents the strength of the currency, Index also explains economic cycle and strength of that currency.
Step 3: Trading Strategy:
Trading Strategy is a combination of Fundamental Analysis and Global Currency Index: Trading Strategy determines the direction of trade of a Currency pair, whether to Buy or Sell a particular currency. Trading Strategy represents signals generated by our system.
Individual Currency Index determines fundamental strength or weakness of the pair. If Individual Currency Index of the first currency is greater than the Individual Currency Index of then second currency in a pair, Fundamental strategy may be positive depending on other factors.
Global Currency Index Strategy is determined by measuring Individual Currency Index against Global Currency Index, this is measured for both currencies in a pair.
If Individual Index of the first currency is greater than the Global Index of the second currency in a pair, then the Strategy would be considered as Buy
These signals generated do not necessarily mean opening a position. Traders may or may not open a position on these signals. Their decision should be based on individual risk reward ratio, risk capital and trader's own strategy. Signals generated in our forex trading strategy are for reference purpose only and not an advice or recommendation to trade.
Forex Trading System generates three types of trading signals:
Buy Indicates:
Opening a Buy Position of a particular pair only based on Technical Analysis
Sell Indicates:
Opening a Sell Position of a particular pair only based on Technical Analysis
Neutral Indicates:
Position can be Bought or Sold, as it carries greater risk relatively. Position open in while in neutral will be for less pips and Risk reward ratio would be high |