The methodologies or systems that are used to make these forecast form the basis for most of the trading strategies out there.
No system or methodology will work perfectly and historical accuracy is no guarantee that a system will work in the future.
When using currency forex system trading with the technical analysis, the approach may have a smaller sample of data available. For example, the analysis might involve only the historical opening prices of the currency pair.
Within the technical approach, there are several models to do the analysis with. For example, some will look at the patterns in forex charts and make predictions based on meanings of the current patterns.
Others, such as some momentum-based models, use statistical analysis to derive forecasts based on the relation of short-run and long run moving averages.
Currency forex system trading that use the fundamental approach try to make forecasts on forex rates and trends based on fundamental economic variables.
The most popular of these economic variable reports,include, International trade, GDP, CPI, Personal spending and Income, Retail Sales and consumer Confidence to name a few.
Fundamental analyze these variables and will use econometric mathematical equations, to evaluate weather to buy or sell a currency pair. They will also apply their judgment, using personal opinions on what the current data means from the markets sentiments perspective.
P.S The secret to making 6 figure income in Forex is avoiding the "account blow-up"- the heart of our training uses a powerful Forex Trading Business Plan; ... Don't miss out! The Free Forex Video Series reveals the ultimate Forex Business!l