Are you confused about which Forex trading strategies to use? Are you stalked in-between choosing from swing trading, or news trading, or day trading, or position trading, or a combination of different other Forex trading strategies?
It could be challenging even after seeing many people earning money from these trading strategies but you fail at every of your attempts.
Forex trading strategies are a specific trading method that is a part of a complete trading portfolio. These strategies offer entry signals, and also risk management, how to exit a trade, and position sizing.
However, the following are Forex trading strategies that can be applied daily;
This is a trading pattern where you can continue trading for weeks and months. The trading time frame is usually fixed on a daily or weekly basis. Under this strategy, traders rely on their trading fundamental analysis such as GDP. NFP, Retail sales, and many others
Also, technical analysis can be used for better tracking of your entries. For example, after analyzing the fundamentals of USD/EUR and determining its bullish state, then you decide not to go long at any price.
Therefore, you hold on for USD/EUR to come to support before deciding on what to do. So, if your analysis is right, you could start your trading at the commencement of a new trend before anyone.
Therefore, under position trading, traders do not spend much time because trading is on a long-term basis. Also, it’s less stressful as traders are less concerned about short-term fluctuations in price.
However, it would require a proper understanding of market fundamentals and a huge capital base because of the wide stop loss.
This is a short-term Forex trading strategies where trading is held for minutes or on an hourly basis. It’s much related to swing trading but it’s quite faster than the swing trading strategy.
The trading time frame is usually fixed at 5minutes or 15minutes. What traders focus on here is how to capture the intraday volatility – this means trading is targeted at the most volatile session because that is where profit is made.
Here, traders do not need to consider the economic fundamentals or long-term trends as they are not relevant. Traders are more concerned about the daily identification of their bias – whether short-term or long-term and trade in that direction.
Here, profit is guaranteed every month if you are good and there is no overnight risk because all trading is closed at the end of the day. With this Forex trading strategies, traders would be able to sell resistance, buy support, trade pullbacks, trade breakouts, and trade the bounce of the moving average.
Besides, there is a need to constantly watch the market – which makes it a bit stressful. A trader can lose more in the event of a massive slippage. Also, it could cost traders a whole lot of other opportunities as they could earn more somewhere else.
This is a short-term trading strategy where trading is done in minutes or even in seconds. Here, traders are more concerned about market performance and how they can take advantage of it. Scalping is one of the most advanced Forex trading marketing strategies.
As a scalper, your trading tool is the order flow – this shows you when to buy and sell orders in the market. However, this is not recommended for retail traders because the cost of the transaction would almost eat up the profits.
Also, as a scalper, there room for many trading opportunities and also permit good earnings from trading. Besides, it could be stressful as you will be glued to your screen for several hours of the day. It is capital intensive – it would require software payment, payment for newsfeed and connection, and many others.
To be a successful scalper, a trader is advised to join a proprietary trading firm as they would provide all the needed tools for trading.
50-Pips A Day
The 50-pips a day forex strategy is one of the latest Forex trading strategies, it leverages on the early market move of some currency pairs. The EUR/USD and GBP/USD currency pairs are examples of the best currencies to trade under the 50-pips a day strategy.
After closing the 7 am GMT candlestick, the trader set two opposite pending orders. When one is activated by price movement, the other automatically cancels out. The profit target is fixed at 50 pips while the stop-loss order is set at between 5 and 10 pips below or above the 7 am GMT candlestick – this is for risk management. The day and scalping trading strategies are based on short-term and short-term means higher risk because more trades are stacked. So, it is important to ensure an effective risk management standard.
Forex Daily Charts
With the Forex daily charts, there is less market noise when compared to other Forex trading strategies. With the charts, traders can have access to over 100 pips daily because of their longer timeframe which can offer some of the best Forex trading activities.
Though there are no guarantees in trading, Forex daily charts are more reliable than even the lower timeframes and even with a greater profit margin. Besides, the traders must be interested in random price fluctuations and daily news.
This strategy works based on the following three principles;
Locate the trends – Identify Forex trends by studying at least 180 periods worth of Forex data and the swing highs and lows. So, referencing this price data on the charts allows for the identification of the market direction.
Be focused – You would need patience and perseverance. Do not jump into the market right away. Hold onto your capital for a bigger and better opportunity.
Larger stop losses and less leverage – Know the intraday swings. However, making use of larger stops does not mean putting your capital at risk.
There are several Forex trading strategies out there, but the best strategy that would guarantee consistent profits can only be achieved through constant, regular, and extensive practice.
However, traders are highly advised to know their trading goals, the time available for trading, and if the strategy suits their personality.