November 29, 2020
Forex trading strategies

7 Best Forex trading Strategies one should use

The traders of Forex use a lot of planning in order to carry out trade .The market therapist and traders are performing well over the coming years by using different strategies. There are many different kinds of strategies used by Forex traders in order to improve their forex trading skills .

POSITION TRADING

This type of technique used in Forex trading  involves  long term success .The strategy is often based on mono economic long term trends followed by different economies. The leverage and the trade size start will the lowest in this plan while expecting profits after a certain amount of time that can be weeks, months or even years.

The fundamental as well as the technical gauges are the foundations that the traders rely on. This type of trading surely requires patience as it does not pursue for fast profits .

RETRACEMENT

This entire strategy is based on the facts that the prices are a variable quantity and it keeps on changing it course  not only between high and low but even changes its entire direction and that is what this strategy takes advantage of .

The traders following this strategy mostly wait for the price to cop out or “retrace” and only then buys or sells a particular product by taking the advantage of the retraction it underwent.

FUNDAMENTAL ANALYSIS

In this type of analysis, the basic fundamental indicators are what traders will be looking into in order to understand whether a particular currency is underestimated or overestimated and how its appraisal has its effect on other currencies. As simple as it may seem, the fundamental analysis is very heterogeneous in nature as it involves many elements of the economic proofs that clearly demonstrates the progression of the investments as well as the future trade itself.

For traders to start with, they can start analyzing the change in the currency values by apprehending the economy trends .News of a country can also help him with the idea of basic trends a currency follows.

TECHNICAL ANALYSIS

This strategy is also greatly devoured among traders .It examines the past and the immediate currency trend value’s behavior. The exposition behind the use of this analysis is that ultimately we know that the market movements depend on the supply, market psychology and demand that ranges for the price of the currency that keeps on decreasing and increasing.

This type of analysis encircles a long list of techniques that help them reveal all the movements of the currency.

This analysis is highly appreciated because it provides them with basic understanding when to buy or sell currencies.

TREND TRADING

One of the most common and popular trading strategy that identifies the ups and downs of various currency values and realizing when to trade depending on the value of a particular currency.

By this analysis they indicate their respective entry and exit points .Now the question remains that how do they study these trends?

There is a very keen study on all the currency movements that cannot be contemplated manually, so there are various tools that are used to examine the trend and trade likewise in a much wiser way. Variety of tools used are: relative strength indicators, volume measurements and various stochastic.

MOMENTUM TRADING

This type of strategy mainly involves the momentum that are both based on the increase as well as the decrease in the price .The strong rise on the price of a product depicts that the price of it will continue to be high valued and likewise for the price striking low, it assumes that the product has lost all its strength.

This technique takes into consideration both the volume and the price.

REVERSAL TRADING

This strategy as the name suggests is based on the anticipation of the product prices by the traders themselves considering their vast experience and knowledge about market trends .They predict it even before it actually happens .

And since it is based on pure prediction, the risk hence involved is paramount. This whole supposition theory is very difficult to come true but when it does, it really is advantages.

Again there are various set of tools available for the same.

SUMMARY

After getting familiar with the various strategies, many traders either make use of a single one or create a hybrid of some above mentioned strategies. As successful as it may seem , but none guarantees a complete success rate .The success pursue to be  in the hands of one with proper management and caliber .

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