The Most Widely Used Forex Trading Strategies
Deciding on a trading strategy can seem like huge task; there are so many options, ready solutions, bots and paid options for you to use. Below we will explore widely used currency trading strategies, giving you a valuable trading knowledge. There are opponents of trading strategies but none the less it helps you define your goals and stay on a specific path.
The purpose of a forex strategy is to assist you in avoiding losses, giving you a goal and indicators to exit a trade.
5. Intraday Trading
This strategy entails committing all of your trading in the duration of a day avoiding overnight movements. This can be a fast paced and exciting way to trade but it also comes with inherent risks. The idea behind this strategy is that the fluctuation of the market in a single day won't be so great as to largely affect a traders assets.
Based on the Fibonacci sequence generally and specifically on retracements of technical, it uses a currency's deviations from a trendline to make trading decisions. These deviations of course are based on the sequence named after the Italian mathematician. This strategy attempts to forecast movements and find patterns.
3. Scalping FX Strategy
Part of a wider intraday trading strategy, scalping is considered an "old school" trading strategy. The trader basically commits small trades instead of large, potentially more profitable but riskier ones. Gains range between 5-10 pips/trade and a trader can choose to use leverage which can both increase loss but potentially help profits too.
2. Range Strategy
Applicable an used in most markets, this strategy involves watching the market closely and entering trades when their low and selling when they are high. Probably the simplest amongst the strategies on the list.
1. Following Trends
Used by both the most experiences and novice traders, another straight-forward strategy is following trends. Basically as a currency or other instrument sees gains, you trade on it, hoping its upward movement will continue.
With a more in-depth knowledge of trading strategies you might want to try your hand at trading, why not use the MT4 one of the preferred platforms of the Forex market, and trade with STO ?
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.