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Charafath

How does forex work ? Explain a little bit the system

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Hi Charafath,
Forex trade involves simultaneously buying one currency while selling another in the foreign exchange market using different trading strategies or systems for analysis and implementations that can maximize returns.
A Forex trading system, which is either manual or automated, is based on a series of analyses to help you decide what to trade and how to do it. The system trading often relies on a set of signals obtained from important news-based events and technical analysis charting tools. Once traders choose an overall style or strategy to follow, they identify signals and inputs that should prompt a trade. The system, depending on how developed it is, sets out everything that follows after a trade is identified, that is, when to realize a profit, where to set the stops, what follow up actions to take.

For a manual system, a trader looks for a signal in the computer screen, interpret his trading plan, and decide what to do. That way, the trader can develop their learning curve, sharpening their skills towards becoming a great trader.
On the other hand, in the automated system, the system is taught what signals to look for and how to interpret them. The automated method, apart from reducing human error, do away with psychological and emotional aspects of trading that often lead to poor trading decisions. Additionally, reaction time when certain levels are breached is reduced. More advanced automated systems come with preloaded common strategies and signals so that you can combine different strategies with ease.

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