There are a number of forex trading strategies that you can use to trade on the forex market. One of these forex trading strategies is the fundamental speed strategy. This is a short-term strategy that you use with fundamental analysis. It is important that you know what you should use for this strategy to be successful. You should also consider why you should use the fundamental speed trading strategy.
The Basis of the Forex Trading Strategies
When you look at any forex trading strategies you have to consider the basis of the strategy. With fundamental speed trading you are going to make a profit from the movements created by fundamental data. Most traders use this strategy as a short-term strategy, but there are some traders who look at it being a more long-term strategy. The timeframe that you use the strategy in will vary depending on how you want to trade and what you want to get out of the market.
The Fundamental Data You Use
As the name would suggest the fundamental speed strategy uses fundamental analysis to trade on the market. There are hundreds of news releases every day and you need to know which ones to focus one. You should look at the news releases that have a high impact on the market. These releases are the major economic releases that impact the currency value. Some of the releases you can look at are the trade balance, the consumer confidence and the retail sales.
The best way to keep track of these releases is to use a forex calendar. These tools will state what the impact of a news release is and when it is going to be released. This information is very important because you have to set time limits to move in and out of the market.
Entering and Exiting the Market
After the news has been released there will be movement on the market. To make the most of this strategy you are going to look for the reliable movement that comes a couple of minutes after the new release. In the first minute after the news release you should not trade because the market often spirals uncontrollably at this time.
Once the random movements have ended you should look at opening your trade. The trade should be in the trend direction that you see on the market. You should not keep your trade open for very long as you want to make the most out of the first movements.
Why You Should Use This Strategy?
Many traders wonder why they should use the fundamental speed strategy instead of a technical based strategy. The fundamental speed strategy limits the amount of time you have to spend analysing the charts. As you are moving in and out of the market based on fundamentals you do not have to do very much on the charts. Of course, as you gain experience with this strategy you may want to combine the fundamental analysis and the technical analysis to make the most of your exit.
This strategy also allows you to easily set a trading schedule. You will only trade around the high impact news. You will be able to find out when this news is coming beforehand which allows you to prepare.