Know When to Let Go of a Forex Strategy, Who’s Who in the Forex Market? Simple Moving Average (SMA) Explained

Happy Wednesday,

Welcome to this week’s edition! We’ve packed it with valuable insights to help you on your trading journey. This week, we’re tackling a tough but important topic—how to know when it’s time to drop a forex strategy that’s just not working. We’ll also explore the key players in the forex market so you know exactly who’s moving the money behind the scenes. And finally, we’ll break down the Simple Moving Average (SMA), a classic indicator that can help you spot trend direction and entry points with ease. Let’s dive in and sharpen your trading edge!

This week’s edition:

🧠 Know When to Let Go of a Forex Strategy

📈 Who’s Who in the Forex Market?

🚀 Simple Moving Average (SMA) Explained

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In the world of forex trading, it’s easy to get caught up in promises of “Holy Grail” strategies. Maybe you’ve seen ads claiming to make $100 a day or 5,000 pips a month. Some traders buy into them, while others build their own dream systems.

At the end of the day, the best strategy is one that fits you. That means crafting or selecting a system based on your trading style, risk tolerance, schedule and sticking with it long enough to evaluate its true performance.

But what happens when your strategy just isn’t working? Here are four signs it might be time to move on:

1. You Can’t Follow the Rules Consistently

If you find yourself ignoring entry signals or second-guessing exits, the strategy might not suit your trading personality. A system is only useful if you can stick to it.

2. It’s Too Complicated or Demanding

If you need to monitor the charts 24/7 or consult a long list of indicators just to take a trade, it’s probably not sustainable. Your system should simplify trading—not add more stress.

3. You’re Spending More Than You Earn

If you're paying for an expert advisor, signal service, or tools that barely help you break even, it might be time to cut losses. A profitable strategy shouldn’t drain your wallet.

4. It’s Just Not Profitable

After enough testing and tweaks, if your system still underperforms across different market conditions, let it go. Not every strategy works for every trader.

Bottom line: Your trading system should be effective, manageable, and aligned with your goals. If it’s not, don’t hesitate to move on, you’re one step closer to finding what does work.

The forex market is the world’s largest financial playground open 24/5 and filled with different types of traders, from global giants to home-based hobbyists. Let’s break down the main players and how they move the market.

1. Central Banks

These are the big decision makers. Central banks like the Federal Reserve and the European Central Bank control interest rates and money supply. Their actions like raising rates or intervening in currency markets can make currency values rise or fall fast.

2. Big Banks

Major banks like JPMorgan, Citi, and HSBC make up the “interbank market.” They trade huge volumes for clients and themselves. These banks act as market makers, buying and selling currencies all day to earn on the spread (the difference between buy and sell prices).

3. Electronic Liquidity Providers (ELPs)

ELPs are high-tech firms that use algorithms to keep the market moving. They place thousands of trades per second, providing constant liquidity. Companies like Citadel Securities and XTX Markets fall into this group.

4. Large Companies

Global businesses like Apple or Toyota trade forex to handle international payments or protect against exchange rate changes. While they don’t move the market much on their own, large deals and mergers can create price swings.

5. Speculators

These traders are in it purely for profit. Hedge funds and prop trading firms use advanced strategies to chase big wins, while retail traders (individuals trading from home) make up a growing part of the market. Retail traders might be small on their own, but together they help keep the market active.

In forex, everyone plays a part whether they’re chasing profits or simply managing risk. Understanding who’s behind the price moves gives you a better edge as a trader.

A Simple Moving Average (SMA) is one of the most popular tools in a trader’s toolbox. It helps smooth out price data to make trends easier to spot.

What Is SMA?
An SMA shows the average price of an asset over a specific number of time periods. It’s calculated by adding up the closing prices for that time frame and dividing by the number of periods. For example, if the last 3 closing prices were 1, 2, and 3, the SMA would be (1+2+3) ÷ 3 = 2.

Because it updates with each new data point, the SMA “moves” along the chart, forming a flowing line that reflects average price changes.

Why Use It?
SMA helps cut through market “noise” to reveal the underlying trend.

• A rising SMA suggests an uptrend.

• A falling SMA points to a downtrend.

Traders use different SMA lengths based on their trading style:

• 5, 10, 20-period SMAs: Short-term trends

• 50-period SMA: Medium-term trend

• 200-period SMA: Long-term trend

Price vs. SMA

• When the price goes above the SMA, it may signal a bullish move.

• When the price drops below the SMA, it could suggest bearish momentum.

SMA Crossovers
This happens when two SMAs—typically one fast (short-term) and one slow (long-term)—are on the same chart.

• Bullish signal: Fast SMA crosses above the slow SMA.

• Bearish signal: Fast SMA crosses below the slow SMA.

SMA crossovers are often used to spot trend changes or confirm trade entries.

In short, the SMA is a reliable trend-following indicator that helps traders make sense of price movements and identify trade opportunities with less noise.