11 September 2017 ~ 0 Comments

A Short Guide On Forex Strategies

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A set of analysis which is used by a smart Forex trader to take the decision whether to buy or sell a currency pair at any point of time is known as Forex trading strategy. Generally the Forex strategies are based on the technical analysis or fundamental analysis of the market. These strategies are available for free or some are paid and some are developed by the trader himself.

Types of Forex Strategies

The Forex strategies are broadly divided into two types and one is manual and second is automated. In manual system, the trader sits in the front of a computer screen and manually executes the strategy but in automated system, the trader teaches software how to look for the signals to execute the trade and execute the trade when it is triggered. Both automated and manual strategies can be bought over the internet and some may be available for free.

A Forex trader should understand very well that no single strategy is 100 percent perfect and it can show failure too. But a person using successful strategies succeeds always because of the presence of a systematic approach to Forex trading. Now let us go over some of the most popular and common Forex strategies.

The Favorite Strategies In Forex Trading

Multiple time frame strategy- This is the strategy formed by analyzing a single currency pair over different time frames. By using a single time frame it is generally not possible to spot the patterns but by using multiple time frames it is possible to understand the patterns well and depict an overall trend.

Scalping- Scalping is a short term Forex trading strategy which helps a trader in making money in short time. A trader has to be attentive as the emotions can come in the way when it comes to scalping trading strategy.

Trend trading- Trading with the trend is a great way to maximize profits safely. You might have heard about the popular saying in Forex – Trend is your friend! You can visit https://www.xtrade.com/ to see which Forex trading  strategies are popular and how the traders make the trade in the direction of trend in order to maximize profits.

Support and resistance levels – Consider a man trying to cross a fence which is blocking his way. This condition is same in this type of strategy and a trader sets a support and resistance level before making a trade order. A high amount of discipline is required as the entry and exit criteria are defined already and therefore the Forex trader needs to understand the limits and follow them. This type of strategy is useful if a trader is using this consistently over a period of time.

There are a number of Forex strategies apart from those mentioned above and a Forex trader should select a strategy which suits his style of Forex trading and the trading plan.

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