The strategy for currency trading or forex trading

THE STRATEGY Ok now, enough with basics. Let’s get down to the actualstrategy.Exchange rates of currency pairs fluctuate based on manycriteria, particularly how investors perceive the value should bebased upon news pertaining to the country of origin of thecurrency. There are many factors that contribute to the perceivedvalue of a currency against another, but most importantly are the“Fundamental Announcements” from that country.Countries and their currencies being traded on the Forex marketsare like companies and their shares being traded on the stockmarket. If a company announces positive news, such as higherprofits in their last quarter, then the stock market immediatelyresponds by the share price rising. Conversely, if the companyannounces negative news such as a loss in their last quarter, thentheir stock drops. In much the same way countries regularlymake various announcements of economic importance, and thevalue of their currency is also adjusted accordingly against othercurrencies.You don’t have to know what the announcement is or even careabout the news to profit by it with this system. All you need toknow is when such Fundamental Announcements are beingmade, and how to profit from it as described in this system. Thisis like owning a magical crystal ball to know exactly theminute when the markets will explode, and how to profit fromit. Regardless of whether the news is considered good or bad,and regardless of how the value of the currency changes due tothe announcement you will make money. Typically a marketeBook 1 “Amazing FOREX System” - © 2004 Robert Borowski – www.AmazingForexSystem.comDuplication and distribution of this material is strictly forbidden11responds by 50 pips to Fundamental Announcements (when itskyrockets); plenty of room to get profits in.There are certain websites that publish a calendar ofFundamental Announcements. You can easily find these for freeon many Forex related websites, and I link to them in the resourcesection of my website (see Appendix A).So the first step is to go to view a Fundamental Announcementscalendar to see what is scheduled to come up for tomorrow(weekdays, not weekends). Some days will have moreannouncements, some days will have less. Generally, the moreannouncements the more trading opportunities you will have, andthe more announcements scheduled for a particular country at thesame time the more likely you will see some interesting priceaction.Before we continue you will need to know what your time zone isin relation to GMT (Greenwich Mean Time), as mostannouncements are published according to this time zone.Where I live is EST (Eastern Standard Time), which is minus 5hours from GMT, however during the summer I am only minus 4hours from GMT. Make sure you take into consideration “DaylightSavings Time” if your time zone changes time in the fall andspring. You will need this information to adjust GMT time to yourtime to know when the announcements will take place from theperspective of your time zone.On the calendars you will see a list of countries that are planningto release announcements, what time the announcement willhappen, and what the announcement is about. Again, you don’treally care what it will be about, only when and who.eBook 1 “Amazing FOREX System” - © 2004 Robert Borowski – www.AmazingForexSystem.comDuplication and distribution of this material is strictly forbidden12Let’s say the US is scheduled to release some announcements,typically 8:30am EST. Then you know the exact time that priceswill skyrocket.Let’s take a look at a chart to see what happened on a fairlytypical occasion. (See chart 1) This is a 1-minute candlestickchart of EUR/USD on June 14, 2004. You will notice that before8:30am the market was just moving slowly along, at 8:30amprices fluctuated just a few pips, then at 8:31am WHAM! it shotstraight up over 25 pips in one minute and over the course of 15minutes it went up about 65 pips. After that the market returnedto moving slowly. Had you traded this system at this time youcould have easily walked away with around 40 pips ($400 UStrading one regular lot, $800 trading two lots, $1,200 trading threelots, you get the idea).This kind of opportunity happens all the time and is by no meansextraordinary. Often it keeps going even further, and if youemploy some of the advanced strategies offered in this coursethen you can sometimes capture over a hundred pips, evenhundreds.Fundamental Announcements occur at various times of the dayand night, depending on where you live. Pay more attention tothe currencies that make their Fundamental Announcements at atime convenient for you. If you live in North America pay attentionto the US and Canadian announcements, and then tradeEUR/USD and USD/CAD respectively. US announcements canbe traded against other currencies, the best are EUR, GBP andCHF. They usually react the same way, but often have larger orsmaller moves (compare chart 2 & 3 as these both happened atthe same time, however you would have made an extra 20 to 30pips trading GBP over EUR). If you live in the Asian regionseBook 1 “Amazing FOREX System” - © 2004 Robert Borowski – www.AmazingForexSystem.comDuplication and distribution of this material is strictly forbidden13including Australia & New Zealand then pay more attention tothose currencies (JPY, AUD, NZD) traded against the USD, andeven against each other. If you are lucky to live in Europe thenyou benefit from being awake during most FundamentalAnnouncement times, and can trade just about anything.Sometimes major news events can cause major price moves, butdon’t worry about these, as they are unpredictable and verydifficult to profit from since by the time you find out about thenews it’s already too late.