An Introduction to Forex Trading Strategies
Are you trying to find a strategy that fits your financial philosophy? There are dozens of different ways to earn money in the Forex market, but not all strategies work for all personality types. That’s why you need to know the key features of the top ways that Forex aficionados trade.
It’s also vital to have a broker that offers up-to-the-minute quotes and functionality. At easyMarkets, for example, it’s possible to trade any pairs using CFDs. That means there are no hidden fees, and the fixed spreads are among the tightest in the industry. Plus, those of all experience levels can opt for any of the many tools for market analysis and have full access to more than 200 global markets.
Whether you are brand new to the markets or have been around for years, check out the ups and downs of the most common buying and selling systems. Some people like to try each method for a while and see if it suits their goals. Here is a little more about each strategy:
Trend Trading
Trend strategies work on a medium or long-term time frame. This kind of system is one of the most common of all because it is simple. After finding an entry point based on one of the many oscillators, like a CCI or RSI, you simply wait for a profitable exit point based on the momentum of the trend. There’s no need to stay glued to your monitors because trend enthusiasts sometimes take several days or even weeks to close their positions. You typically enter after observing a string of higher highs and lower lows. The advantages of trend trading are the number of opportunities and a nice risk-to-reward ratio.
Scalping
Scalpers live for the quick kill. Trades with this method sometimes last just a few minutes or less. The goal is to obtain very small profit margins on a frequent basis. Even a tiny gain is good if you can replicate the deal 20 or 30 times within a few hours. Scalping is a busy, demanding way to deal Forex but many people love the constant action and adrenaline. The risk-reward ratios are low, but there are hundreds of good opportunities every day.
Day-Trading
If you have a lot of time to devote and don’t mind volatility, this method might be for you. Because you close all positions at the end of the day, there are no overnight holds. Plus, there are plenty of opportunities to buy throughout any given day. On the downside, this strategy tends to work for people who can make this more of a job than a hobby.
Swing Trading
Another technical-based way to go about your Forex action, swing enthusiasts sometimes hold positions for several days, so aren’t tied to their screens like scalpers are. The risk-reward ratios here are average and the time investment can be considerable. The philosophy is based on being able to read the trend with indicators and other technical tools, which is a big appear for many people who choose this way of Forex trading.
