Trade Forex with a Directional Strategy

Commercial and investment banks and other institutional investors like hedge funds. Today, however, there are many venues where just about anyone can trade currencies. These include currency futures, options on futures, PHLX-listed foreign currency options and the largely unregulated over-the-counter (OTC) forex market. Once the forex trader has decided which venue(s) and instrument(s) he or she will trade, it's time to develop a well-conceived trading strategy before putting any trading capital at risk. Successful traders must also predetermine their exit strategies and other risk-management tactics to be used should a trade go against them. Here we look at how to develop a trading strategy for the currency markets based on directional trading.