One of the typical challenges for most Forex traders is to estimate out the best strategies for them to use while trading currencies. They cannot just pick the perfect one among various strategies like scalping, swing, position, or news trading. Even naming the strategies can be frustrating for some of them. Many traders may have already tried several of these methods, and each of them may have failed them. Now they don’t even know how to find the best one for them.
Forex Strategies That Work
To bring an end to your suffering, we have listed all the strategies that have worked for traders who have deployed them in real trading conditions. We have given guidelines on how to choose the best one for you.
1. Position Trading
This is one of the long-term approaches where traders are required to hold their trades for weeks to months. The timeframes they follow are either weekly or daily ones. Being a position trader, one has to use fundamental analyses such as NFP, Retail sales, GDP, etc. These instruments give the most optimum signals of crucial market moves.
Technical analyses can also be a viable, credible source of such signals. With position contracting, investors can save themselves from looking at the screen for a long time. It allows them to be calm, lessening the stress amount, and as a bonus, this strategy offers a great risk-reward ratio.
This is a medium-term method with which traders have to hold their positions for days to weeks. For this method, they have to use the single hour or the four hours timeframe.
Being a swing trader, one has to deal with only one concern, and that is how to capture the one move in the market. He has to undertake some general procedures repetitively like buying support, selling resistance, leveraging breakouts, deploying pullbacks, and exploiting instruments like the moving averages and bounces. That’s why they have to learn to read both fundamental and technical signals and attain mastery in exploiting them to gain the maximum possible profit.
Some investors in Singapore prefer to trade mutual funds. Navigate here and read some posts on technical analysis to gain more knowledge about the swing trading method.
3. Day Dealing
This is one of several short-term dealing methods that are highly popular among traders. Day speculators are required to hold a contract for minutes or maybe hours. It can be teamed with the swing business that has a faster momentum. Traders usually trade in a 5 minute or the 15 minute time window.
As a day trader, one’s responsibility is to capture the volatility within a day and make the best use of it. The greater the volatility, the more chance of making a profit a trader will get. They have to buy support, sell resistance, trade breakouts, and trade pullbacks and trade the moving averages and the bounce.
Big players like the financial fundamentals and or long-term movements become irrelevant to a day trader. Instead, he has to identify his propensity for that day and follow along the direction it provides.
Scalping will not be very profitable to the retail traders as they eat up most of the profit money with the transaction cost. To make a considerable amount of profit, one has to be swift and fast while dealing with all the procedures and calculating pip by pip movement of the market.
Scalpers have to hold a position only for minutes and even seconds sometimes. They can overlook all the market driving factors if they want. The only thing they have to deal with is the instant market condition and look over every tiniest change and extract profit out of it. In order to do that, they have to acquire agility in placing and exiting an order in the market.