How To Build A Strong Trading Strategy????

1. More than just one technical tool: a decent strategy should contain at least 2 different indicators, one of them is a leading indicator and the other one is a lagging one while 3 indicators will give you a more slower signal but it'll be a more stronger one.
2. A fundamental rating measurement factor to measure the news effects: this would be a self-established one which can be discovered by testing the news effects on the FOREX market and measure it to establish a factor that suits the trader.
3. The trading time frame: keep in mind that a scalper wouldn't wait to take confirmation from 2-3 indicators on a H1 chart, he is waiting usually for a tick up or down to enter his position, some other ticks and he is out.
4. Your account equity: what ever your trading strategy or trade length, never put all the eggs in one basket, keep an open eye on your equity, not your balance.
5. Risk factor: setup your daily risk ratio and never exceed it if you lost on a day, you'll never get back the money you lost by going emotional and try to achieve revenge. If you have to lose and you already lost the supposed risk ratio, stop trading at that day, have some rest then try to study that position and the mistake that did lead to that losing trade.
6. Daily targeted profit: when you get your target achieved, take rest and save your efforts for studying the next day opportunities. If you are about continue trading, set a stop loss of no more than half the achieved profit and don't go so greedy.

Weekly currency outlook

We are still seeing the Dollar struggle to fully round this next bend but we continue to see more upside opportunity in dollars than downside risk. Therefore we continue to favor buying dips as it has paid out over 5000 pips for us since June 1^st of this year. We expect to see many dips to buy this week so be ready for some entries, many of them will be either fading new highs or buying new lows so be warned it will not be comfortable…at first…but in time it will look like genius.

EUR/USD:

This pair continues to present medium term entry opportunities as it trades north of 1.50. We are looking for spikes early this week to sell into. Look for the herd to chase this thing for a bit so we could see spikes into at least 1.51-1.52.

GBP/USD:

We are happy sellers this week near the 1.68 handle and expect to have a few opportunities above that to sell into. We could see some squeeze potential up to 1.70 but all of those wicks are just that much more of a sell. We continue to see the BOE as being too loose and really the lapdog of the FOMC so until that changes we want to sell strength here as it is temporary at best!

USD/CHF:

Parity remains a solid support level at this time and near term we do expect it to hold.
We are looking to buy dips back towards parity over the next few weeks.

USD/JPY:

This pair continues to see wild volatility as the shift from using Yen for carry trades to Dollars continues. This pair and other crosses with the Yen will continue to see extreme periods of bi polar activity as global risk shifts away from Yen and towards Dollars.

AUD/USD:

This pair is in a bubble of its own partly due to the commodity bubble we have seen reflated this year. This will be the “canary in the coal mine”. As this pair turns back before hitting parity you will see it lead the way down just as it has lead the way up in this global ponsi scheme the central banks seem to be running.

USD/CAD:

This pair has also turned just before hitting parity. We expect to see it push back up towards 1.10 before the year is out.

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BOE GOVERNOR'S WORDS TANK THE POUND

The British Pound Sterling fell across the board on Wednesday, after the Bank of England’s Governor, Mervyn King, said a slide of the Pound could help UK exporters and aid Britain's recovery from recession.

The remarks came after the UK released data on inflation which came in below the target, a better than expected showing.

Investors are nervous however, even with the good inflation news, that after the elections early next year, the new government will implement a policy of fiscal tightening, which will likely cut the asset-buying program, a program that is widely hailed as a success.

At 10:15PM GMT, the British Pound was trading down 1.2% versus the US Dollar to .9288, down 1.02% to the Euro to .9042, down 1.15% to the Japanese Yen to 148.6, down 1.1% against the Swiss Franc to 1.6691 and down 1.06% versus the Australian Dollar to 1.7802.

Using Fibonacci Retracements with Support & Resistance Levels in Forex

One of the essential principles of applying technical analysis to forex trading in a profitable manner is that you want to see multiple confirmations for an entry point before you actually enter the market.

If you are making trading decisions based upon prominent candlestick formations on a long term chart, it would also be wise to check with a number of other indicators when you get a buy signal in order to make sure that there are no contradictions. In this article we are going to focus on how Fibonacci retracement levels coincide with support and resistance levels, and how you can use these two different technical indicators in conjunction with each other in order to yield accurate market entry signals.

Let’s start by defining what both of these types of indicators are. Fibonacci retracements are based on the number 1.618 (also called the Golden Ratio) that is found in all natural orderly systems from flowers to the human body to the financial markets. Over the years it has been proven that when the price of a currency pair has a large move and then retraces back in the direction of the previous value, it is statistically more likely to rebound at the levels of 38.2%, 50%, and 61.8% of the original price move.

The way that many traders use Fibonacci retracement levels is to determine when to enter and when to exit the forex market. A Fib retracement can give a buy signal when the price hits one of the three Fib values and then rebounds, or it can show that the market is ‘running out of steam’ and it is time to exit when the price approaches one of the three Fib values and then falls. While Fib levels can be excellent indicators, it is never wise to enter into a trade based on these values alone.

Support and resistance levels are pretty much exactly what they sound like: Support levels are the price values below the current price data that the market will tend to rebound off of, and resistance levels are exactly the same except they are above the current price data. Support and resistance levels can offer strong forex entry signals when the price breaks through an established level, as when this happens the price has a tendency to continue moving in that direction.

S&R levels and Fib retracements are both powerful trading tools individually, but when you combine them together the trading signals become much stronger and more reliable. As mentioned above, a Fib retracement can give a strong market entry system when the price retraces a given movement and then switches direction around one of the three main Fib values.

As a general rule of thumb when trading the forex market, the longer the time frame of a chart, the more reliable the trading signals that are generated. So if you happened to be looking at a 4-hour or 8-hour chart and you saw a strong Fib retracement signal, the way that you could confirm this signal using support and resistance levels is to see whether the Fib value is also a predominant S&R level.

If the price bounces off the S&R level, this is not as strong an indication for market entry as when the price passes through an established level, because once the price crosses an established support or resistance level then it has a tendency to continue moving in that direction.

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