It’s important that every investor realize that we are not limited to stocks, mutual funds, ETFs and bonds. There are other asset classes, such as commodities and currencies (forex) that offer profit, too. Trading anything requires consistency and a system to be regularly successful. The same systems that analyse stocks are applicable to intraday trading of foreign exchange futures.
The first system is bottom trading a downward trend (note that the EMA is moving downward). That means, if we see the Euro become “oversold” (or if it’s sold on very high volume, and dips below the lower Bollinger band) it is likely due for a technical rebound upwards. Because of the weakness at this point, I only hold the Euro until it peaks the EMA and sell the futures contracts there. This is a bullish sign, but it’s also a point of resistance.
The second system is momentum trading. I trade the upward trend, purchasing futures contracts as it moves above the moving average, which you will notice is establishing an upward trend (notice upper/lower bands). As the Euro crosses below the EMA again and the bands begin to widen indicating increased risk, I sell.