Are you fascinated with the profits possible with Forex Trading? Are you on the quest of finding the right way towards earning profits through Forex trading? Do you want to explore deeper into the Forex market? Well, you have landed in the best spot.
Foreign Exchange Trading is surely a faster space to earning whopping amounts, being more volatile, and having more scope of profits than other markets. But, it is not as easy as it is in the air now. One must be aware of the risks involved in Forex trading as well before jumping into it, especially without having a proper strategy.
Right after learning about the Forex markets theoretically, it’s time to learn how to frame a specific strategy based on the ongoing trend. Learning about framing and implementing strategy is the only way that takes a beginner deep into the trading chest that has immense scope of earning high returns.
Here are a few common strategies that can lead you in the right way towards the returns that compelled and fascinated you to hop in Forex trading.
- Price Action
As the name suggests, this strategy involves studying the history of the prices of the chosen currency pairs. This study was later used to frame real-time technical trading strategies to forecast the upcoming trend.
It is the most common strategy used by both beginner and intermediate forex traders and is quite fundamental for forex trading. Understanding the action of price from history is sometimes not enough to formulate a technical strategy which is why it is often complemented with many other essential indicators.
Even pro traders start understanding a currency pair by studying their price action to forecast the upcoming trend in the chart or else to choose the pair over others.
- Range trading
If you are familiar with the basics of forex trading, you are surely familiar with the essential elements of the market, i.e. resistance and support. Range trading strategy is all about identifying the resistance and support points.
This strategy is often used right after using the price action strategy and entering into the chart depicting the trend of specific currency pairs to choose key levels on the trend to place a trade.
It often works well in the market unless there is an adverse movement due to significant volatility. Range trading strategy can work for any time frame and one should place a trade only after considering it.
- Trend trading
Like range trading strategy, trend trading strategy is also used by all beginner, intermediate and advanced traders out there. It involves analyzing the historical length of the trend and use it to forecast the upcoming trend to place trade.
Trend trading strategy, as the name suggests, works exclusively to deliver positive returns, but it needs to be complemented with other tools and indicators as well. It revolves around the directional momentum of the market and the fluctuation it is undergoing from time to time based on the resistance and support all along.
- Position Trading
Position trading strategy involves deciding a specific position in the market where the trade should be placed. It is framed based on several technical methods using different tools and resources.
Position trading strategy is probably a long-term strategy but it doesn’t involve analyzing every minor market fluctuation. The main reason behind not including minor moments in the trend is because not every fluctuation affects the market broadly.
Even professionals use this strategy using different tools provided by the chosen platform and gain information from multiple resources.
- Day trading
It is a special strategy that is designed to trade currency pairs using many tools and technical aspects but within the same day. Therefore, the strategy closed with the market day and one can place multiple trades throughout the day based on the trends.
Well, day trading involves every common strategy that decides entry/exit points in the forex market for every trade placed.
All those above-mentioned strategies are the base for every experience level of traders out there. Even the high-end strategies begin from implementing those strategies one by one. As a beginner, one must get familiar with those strategies and practice them in the demo account of the chosen platform to get started as a forex trader with decent initial returns.