2 Forex Trading Strategies Every Beginner Should Learn

When it comes to forex trading strategies, there is a wide range of things a trader can do in order to try and make a profit. This can be both technical trading strategies as well as fundamental ones, which are based on the economy. Each of these trading strategies is going to be different from one another, but the general formula remains the same: make the most of the existing market condition.

While there are many types of forex trading strategies out there, here are two that you should learn about immediately:

Forex Trading Strategies

Day Trading Strategy

Forex day trading involves trading positions (opening and closing) in the currency market within the same trading day.

A day trader is an investor who prefers to take advantage of small price changes that occur in highly liquid stocks or currencies. Day traders generally operate on the premise that they will open and close positions within very short time frames, typically holding their investments for minutes or even seconds at a time. The constant variation in price makes profit margins smaller in this type of trading but also offers greater potential returns.

A good example of day trading is scalping, which is a strategy that exploits small price gaps created by the bid-ask spread.


Price Action Trading Strategy

Price action trading involves using price movement to make trading decisions. The raw price movement on a candlestick chart is tracked and accordingly trading decisions are made.

In price action trading, traders want to know whether prices are trending, which direction they are trending, and how far they are likely to go in that direction. This kind of analysis is challenging because prices rarely trend for long periods of time. They mostly move sideways most of the time, making it difficult for traders to identify a trend when it is forming or has formed.

Prices do eventually break out from these consolidation patterns and make trends that can be traded profitably by price action traders.

 

Learn and get better at forex trading

Of course, there are currency trading strategies, right from swing trading to position trading. However, the mentioned two are profitable forex strategies that every beginner should learn.

So, invest time in learning about different forex trading strategies and become a better trader.

Comments

Post a Comment

Popular posts from this blog

Types of Forex Trading Account

Image
The type of forex trading account you choose is an important part of the process. So, you must understand each of these types – their features, functionalities, limitations, and charges. Service providers also offer different rates for their accounts, so one should compare all the existing accounts and pick up the one that suits his needs best. Let’s have a look at what are available types of forex trading accounts and how are they different from one another. Demo Account The demo account is available to everyone who is interested in Forex trading. It is a very educational and interactive account that gives new investors the opportunity to test their skills and knowledge without the risk of losing any real money. The demo account is used by both professional traders and beginners. Professional traders use it as a testing ground for new strategies or trading techniques while beginners use it as a way to get familiar with the market before they start risking real money on trades. ...
Read more