If you are looking to learn a little more about how you can improve your forex trading and give yourself some more strategic nous when making your trades then look no further than our guide on finding a forex strategy that works.
Our guide on the best forex strategies gives you a detailed look at some of the strengths and weaknesses of these strategies for more experienced forex traders. We also look at why forex strategies like momentum, carry trade and breakout strategies are best for beginners and how best you can go about implementing them.
There is a plentiful supply of forex trading strategies to choose from, all with their own merits and ability to improve your trading. As there are so many options, these forex trading strategies are for everyone who is interested in taking a stab at trading. If you are brand new to forex trading and you have no idea where or how to start, then taking on a solid forex strategy that works will help you to get the lay of the land.
Intermediate and seasoned forex traders are not left out of this equation either as we want all our readers to find a forex strategy that works. As we said, there are numerous different forex trading strategies for you to choose from. Our forex strategies guide is going to pick out a few of our favourite forex trading strategies that have been known to have some of the most success. We are also going to give you a breakdown on what strategies you should be using if you are a beginner and what strategies are better suited to the more experienced and dedicated forex traders.
Trading forex can be an exciting form of trading but it brings with it a number of different obstacles for you to overcome at any given time. If you are going to go it alone based on your own knowledge of forex trading that’s fine but it may not be enough for you to genuinely see improvements and gains in your everyday trading. Which is why you need a forex strategy that works.
That is why at TradersBest we highly recommend that you take on a forex trading strategy that is going to help you know what to look out for and how best to go about executing your trades. As we said, there are a number of different forex trading strategies out there, so the initial process is going to be very much trial and error until you find a forex trading strategy that suits you the best. You might get lucky and find the best forex trading strategy that you love to use right from the start.
Not everyone can find a forex strategy that works right off the bat though which is why we want to give you a detailed layout of some of the best forex trading strategies for beginners and experienced traders. We take a look at the way some of these strategies function and what some of their key merits are. First off, let’s take a look at options for a forex strategy for beginners.
If you are fairly new to the idea of forex trading then you will need a forex strategy that works best for you. That is why our team at TradersBest has put together three strategies that we believe are the best for newer forex traders to take on:
A momentum trading strategy for forex is essentially what the name suggests, you are going to buy forex if the price is trending upwards and sell your forex if the price is on a downward trajectory. It really is that simple. There is another form of momentum trading that essentially aims at only selecting the best of the currency pairs whose prices are trending upwards.
In other words, choose the best of the best of those currency pairs that are steadily doing well. It is worth taking a look at the previous three months of a currency pair/pairs that you may want to invest in. This has become the most common trend in forex momentum trading for a reason as it is the best way to ascertain how steady the upward trajectory might be. This is genuinely a forex strategy that works when executed properly and is a great forex strategy for beginners.
Of the beginner strategies out there the carry trade strategy may seem a little more complex at first but in reality, it is a simple concept to grasp. A carry trade strategy is based on the difference in interest rates between two countries. If you buy and hold a currency overnight you will be paid the interest rate of the country that you bought the currency from initially. You are essentially borrowing from a low interest rate country to pay for a currency that provides a higher interest rate.
The point of executing a carry trade strategy is to try and profit from the difference between the two interest rates. The profits from a carry trade strategy can be really significant but it’s worth pointing out that while straightforward this type of forex trading strategy has some risks. This is because the trades are often highly leveraged which means you can lose your capital investment and then some if they trade goes poorly. With that being said, carry trade strategies are still very popular amongst forex traders today and is a great option as a forex strategy for beginners
First and foremost let’s explore what a “breakout” means in forex trading. A breakout simply means that the price of a currency pair has moved over and above a resistance area on the analysis graph. These are known as “bullish breakout patterns”. So, how do you use a breakout trading strategy to your advantage? With relative ease, all you are looking out for with this strategy is for when a breakout occurs. A breakout will often be an indicator for increased market volatility. You can then use this volatility to your advantage by riding the coattails of the new market trend towards increased profits.
The goal of a breakout trade strategy is to enter the forex market when the price has made its move above the resistance point and then hold your trade until you see the volatility of the market begin to die down. You will need to stay vigilant for when it starts to turn but in terms of the actual difficulty of executing this strategy you will quickly come to grips with ins and outs of it. Even then, it is a quality forex strategy for beginners.
Now that we have our beginner forex traders covered with a few popular forex trading strategies it’s time to delve into the more complex strategies fit for seasoned forex traders. Here are a couple of forex trading strategies that are a little more difficult to execute but are no less promising in terms of their potential for trading success:
A scalping trading strategy essentially refers to taking smaller profits but on a regular basis. Scalping is done by opening and closing multiple trading positions throughout a day. When executing a scalping trading strategy you will typically want to stick to liquid currency pairs as they have the smallest spread. This makes the short term nature of the trades and the frequency at which you open and close positions more profitable.
A scalping position is not generally open for longer than 30-minutes and so differs in this regard from your average day-trading positions. When executed properly, a scalping trading strategy can help you to build profit from numerous different open positions. You also have access to an even greater number of forex trading opportunities then you otherwise might have with a different strategy.
The crux of a scalping strategy is knowing what the best entry points are for your trades and what the short term trade will be. This will require strong technical analysis and a decent amount of time invested to give yourself the best chance of executing small profitable trades throughout a single day.
Where a scalping trade is completed within a matter of minutes, position trading is the polar opposite. A position trading strategy sees traders open and holds a position for an indefinite period of time. This could be days, months or even years. A position trading strategy looks to capitalize on market trends in the long run which puts them more in the category of an investor than your everyday trader.
This type of trading strategy is perfect for those traders who don’t have regular timeframes to babysit their trades all the time. It’s also a good option for experienced traders who are looking to diversify their trading portfolio by having a long term trade amongst their daily and weekly positions. The goal of a position trader is to identify trends in the price of currencies that they believe will steadily continue for long periods of time.
Day-Trading
Day trading is fairly similar to scalping in that you are opening and closing positions within the same trading day. However, it differs in that you can hold your position open for the entire day before selling near to the close of day. Ultimately, the main goal of day trading is to discover and leverage short-term market inefficiencies. A day trader’s only concern is the short-term price movement of a currency pair or pairs and nothing else.
Day trading can be somewhat risky as the transaction costs for opening and closing numerous trade positions during the day can be steep and may not be worth the profits. It will depend on the technical analysis tools and market indicators that are informing your decisions that will ultimately decide how well you profit from day trading.
Now that you know a little more about the different strategies available to you, you will need a solid trading platform for you to put them into practice. There are a number of different online brokerage firms out there to choose from so it can be a little daunting at first to make your choice.
Not to worry because at TradersBest we make your life so much easier by conducting our in-depth and unbiased reviews of these platforms. You can find all these reviews on our site, give them a read and then make a more informed decision about which broker is going to do the right job for you. We also curate our ranking system where we list in order from first to last the brokers that we rate most highly.
We are constantly updating our website with the reviews of the newest online brokerage firms so you can always check back with us to see if any of these newer platforms are worth changing for. We also subsequently update our rankings so keep an eye out to see if a new broker has knocked our current number one off of the top spot.
Forex trading strategies are a fantastic way for newbie forex traders and seasoned pros to improve their trading experience. Each forex trading we discussed in our review has its own merits and risks and each of them can be a forex strategy that works. The trick is to find the strategy that is going to suit your style as a trader and suit the amount of time that you have available to dedicate to trading every day. At the end of the day, it is up to you to decide which of these strategies is going to serve you best.
Remember, these forex trading strategies are not a guarantee for success but rather well thought out blueprints for how you can improve your forex trading and give yourself the best chance for making profitable trades. There are no real forex strategy secrets you will still need to put in time, effort and use the right types of analysis for you to come away smiling. You can always check out our TradersBest site to find out more about where you can find the best online brokerage firms and the latest trading strategies for different financial markets.
At TradersBest, we want to give our readers who are fairly new to forex trading a fee trading strategies that are well-suited to your experience. That is why we compile a list of the forex trading strategies that are perfect for beginner traders. They are easy to grasp, easy to execute and should make your first steps into forex trading far more manageable.
While our forex trading strategies guide helps newbie traders on their way to better understanding forex trades in all forms, we don’t for one second forget about our more experienced readers. Our guide will point out and explain some of the more complex trading strategies for seasoned forex traders. We explain how to use these strategies and what some of the forex strategy secrets are.
Each of the forex strategies that we discuss in our guide brings with it its own set of positives and areas where they are most effective. At TradersBest we use our guide to help explain how you can best go about using a position trading strategy with certain currency pairs. As it is essentially a long term investment you need to pick the right trends and currency pairs that are going to suit this type of trading strategy.
At TradersBest our goal is to make new and seasoned forex traders lives easier. Our trading guide will give you a detailed look at all different kinds of forex trading strategies while keeping it simple and to the point. You will be able to learn new forex trading strategies with our guide in no time. From there, you can enter the forex markets with more confidence and strategic nous.
Many new users of forex will ask “is a forex strategy profitable?” At TradersBest, we would never presume to tell you that any strategy for any financial market is a guaranteed home run. No, instead we give you a detailed breakdown on the strategies that have had the most success for other professional traders in the past and in today’s markets. You may not be guaranteed a profit from your trades but you can certainly increase the likelihood that your trades are going to be successful.
Trading financial products carries a high risk to your capital, especially trading leverage products such as CFDs. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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