Last Updated: January 3, 2022
To become a proficient Forex trader, you have to be able to understand the general systems in Forex trading and how these systems work. Those systems are what I would call the very foundations of who you would become as a Forex trader. Whoever you are, whether you are new to Forex or have some experience in Forex, you should always adjust your system closely related to your personality. Without further ado, below are what I mean about the general systems in Forex trading.
Following The Trend System
This is the first system and from my point of view, this system is easy to use as you only have to perceive the Forex market's current trend and you follow that trend. To identify the current trend, a Forex trader could analyze the market first, that is, by using technical or fundamental analysis. These two analyses are important in Forex. It serves us to look at the Forex market condition.
Counter Trend System
Move on to the second system, that is, the Counter Trend system in Forex strategy allows to take a profit by opening a position opposite of the current trend in the Forex market. This system sounds interesting but from my subjective point of view, I do not recommend it for new traders who just started their career in Forex trading. Just like the requirement of the first system, you have to analyze the Forex market first before you trade this second system. Usually, Forex traders who are using this system, analyze it using support and resistance from technical analysis.
Hybrid of The Two Systems
If you are a professional Forex trader and you are already proficient with the two systems above, you may be able to combine the two systems to increase your performance in trading Forex. But, trading with one system is completely okay if you found that this third system makes you do a lot of work in the Forex market it may make you confused on what is the current market condition.
Conclusion
In short, the systems in Forex strategy would be the foundations of trading in the Forex market. The first system is Following the Trend System that you could apply by following the current trend of the Forex market by looking at the chart of an asset you trade. The second system is the Counter Trend System in which you could open a position the opposite of the market trend that is usually analyzed by using support and resistance. And, then comes the third one, that is, using the combination of the first and second systems that could be called as Hybrid of The Two Systems wherein this system requires you to be proficient in both the first and second systems.
Written by Andre I.
Reference
I forgot where I got this but I still remember it clearly until now because I am a Forex Trader too and it is crucial to know the systems if you want to make a profit from the Forex market (I would update it if I discover the reference)