A forex strategy is a trading plan or method that a trader uses to get prosperous and successful trades. The Forex strategies play the most important and vital role in a winning game. There are hundreds of trading strategies. Although, only a few of them are applicable and easily understood by forex traders.
Forex Strategies in Detail
To make you understand better, here we are illustrating a few and most frequently used forex strategies by the traders. It contains their details, way of application, pros, and cons.
1. Over-lapping Fibonacci Trading
This forex strategy is popular among traders. It requires a high concentration while using the signals and indicators. Most traders do not get successful by using this strategy due to the inappropriate method of implementing it. However, if you exactly use it the way it is, you will find 100% results.
2. Swing Trading
Swing trading is a hypothetical strategy. The trader firstly identify the tops and bottom of an instrument. It is a short term strategy as holding positions are held between a few hours to few days. Oscillators and indicators are used to identify the entry/exit position with shirt time frames. It is the most common forex trading strategy by traders in both trending and range bound markets. This strategy gives you multiple trading chances that are a high risk to a high reward ratio. To use this technique, one must have a strong grasp of fundamental and technical indicators.
3. Price Action Trading
It is the strategy used to identify the previous prices for the formulation of a technical trading strategy. Price Action can be used as an indicator. There is no use of fundamentals in this method. Bladerunner trade is an example of this method.
You can use various methods for the determination of the support and resistance level or entry/exit points.
Time frame, Using candlesticks, Fibonacci Retracements, Indicators, Bollinger Bands, Oscillators, Patterns(rarely used), and Trend Identification can be used.
4. Range Trading Strategy
Range trading identifies the support and resistance points through oscillators. You can use oscillators as timing tools. The most commonly used oscillators are the Relative Strength Index, Commodity Channel Index, and Stochastics. Price Action and oscillators are used to find range-bound signals or breakouts.
Spend quality hours to implement this technique. Iit will give you a fine result with beneficial trading. This will also increase your chance of return and lower your risk.
5. Trend Trading Strategy
In this strategy, the traders have a positive returns by determination of market momentum. In this technique, trades took place from medium to long term, and trends change in length as with price action. You can use multiple time frames. By using oscillators, you can determine entry/exit points . For a gain of $5 as profit, you have to put a stop-loss of $5 from your entry point. When you get your profit just exit the trade. This strategy enables you to get more and more trading benefits. But you also have to spend hours on it.
6. Position Trading
Position Trading is a long term strategy which only compromises on fundamental factors. The usage of technical indicators in this method is rare. The reason is that it is a long-term strategy. It took months and years by forecasting economic factors that can affect markets in the future. In this strategy, you can estimate the entry/exit point through an economic calendar and with some formal technical indicators discussed above. You do not need to spend a healthy time on it. This technique gives you a few opportunities to trade.
7. Intra-day Strategy
In day trading, you have to close all positions before the closure of the market. In this strategy, a trade can be executed in minutes or hours and is open and closed within the same day. Numerous trading opportunities are present. It is your choice to execute single or multiple trades. But on the other hand, it takes a few hours or time to work. However, it is a highly risky strategy if you do not have a strong grip on technical and fundamental analysis. You can also say it a news strategy.
8. Candle-Bar trading
Candle bar trading is a long term trading strategy. You must have to wait for the entry/exit points with great patience . This technique take time from months to years. It gives you a wide and clear view of futuristic markets and trends.
In forex trading, there are numerous strategies, techniques, and methods. These strategies are for lowering the risk and optimization of trading. However, every trader is not always successful by using them. To get maximum results from these strategies, get more education from your broker about them. Apply them on a low amount for practicing. This way, you can execute your trades successfully to some extent.
For reading more useful articles, visit our website, www.forex-scams.com In case of any query, always feel free to contact us. We will respond to you.