Forex Trading Strategies

Forex Trading Strategies for Beginners

Strategies: Forex Trading

Generally, people feel that Forex is complicated. Realistically, it is like many other investment options, where little knowledge can be risky. Luckily, with Forex, there are many strategies to adopt that are good enough to realise any investment goal. Commitment can vary from watching the market every day, looking for quick profits at every turn, to a simple long-term investment; there is something for everyone.

Following Daily or Weekly Trend:

A simple Forex trading strategy is to follow the daily or weekly trends. Find a well-supported trend by reviewing the daily and weekly charts and jump in. With this strategy, be conservative when you buy in, and be patient, your moves may look small, but they can span 100’s of pips. To avoid watching the market constantly, place a reasonable stop and profit mark, beginners find this the easiest strategy. 

Carry Trading:

This style of trading is where you buy and hold a currency that pays a high interest rate against a currency with a low-interest rate. A rollover is paid every day for the difference between the 2 currencies. Therefore, even when your trade is not moving, you still earn money daily. With this method, you are paid on the size of your trade, not just on your capital as most Forex trades are leveraged.

Of course, for every upside, there is a downside. The risk you take is typically higher than the reward. The differentials between currencies are normally small. Currency pairs that trade well are heavily affected by any news that relates to the global markets. Therefore, when things are good, you will be paid, but when things turn, they can plummet hard and fast, burning your account if you are overleveraged.

Day Trading:

The Forex market doesn’t sleep, 24 hours a day, 6 days a week. However, there are certain, specific times where the market is most active. The market can be very technical and day trading requires technical analysis, but with a sharp eye and a plan, you can seize it and make a profit. Depending on what you like to trade, you can pick and choose your times. With a sharp eye and a plan, you can make a profit.

Fundamental Trading:

An old-fashioned approach to investment is adopted by some investors. Preferring to invest in something they can understand instead of looking for signals on a chart. Fundamental Forex trading works best for this type of cautious investor.

Fundamental trading requires an understanding of economic reports and how you compare them to other countries. This type of trading is simpler because it looks at things over a longer term. Fundamental trading involves following the news for several countries with strengthening economic trends and playing them against those with weakening economic trends.

Even though Forex trading can feel complex, everyone can learn given patience and persistence. Mistakes will be made, so long as you know why and can avoid it in the future; you can gain expertise over time. Starting small at least in the beginning and not allowing the system to frustrate you is paramount. Avoid the “100 percent accurate Forex trading systems” for when you have gained some experience.