There are many people who are making a decent living from forex trading these days. Some will be trading on a part-time basis, whilst others will be trading the markets on a full-time basis. So how can you actually join this elite group of traders?

Well you obviously need to come up with a winning strategy. There are lots of ways you can do this, and they will all involve a lot of back-testing and experimentation. However when constructing a strategy, there are two different types you might want to consider.

The first is to try and find forex highs and lows, ie enter long positions when a pair seems to have bottomed out and go short when it seems to have reached a peak. This sounds easy in theory, but it is actually extremely difficult in reality.

The problem is that although there are lots of different types of technical indicators you can use to try and spot these turning points, there are still no guarantees. The price of a particular currency pair will sometimes appear to have reached a peak according to several different indicators, but will still keep on going higher and higher.

That is why the other type of trading strategy is arguably a lot more productive, and that’s to always trade with the prevailing trend. So in other words if the forex pair is in an established upward trend, you should be looking to go long on any signs of weakness rather than trying to go short on any peaks. This is so much easier because trends can remain in place for a very long time on the longer time frames, and the odds of success are firmly on your side.

So the point is that you can come up with currency trading strategies that go against the trend and with the trend. However in my experience it is always better to trade with the trend, regardless of which time frames you prefer to trade.