Forex trading is considered as one of the most profitable careers in the financial world. Thousands of forex traders watch market analysis with bated breaths every day to check if their trading strategies have brought in profits.
According to the 2019, Triennial Central bank Survey of FX and OTC, the global foreign exchange (forex) trading market is the largest financial market in the world. The value of the international forex market has crossed more than $ 6.6 trillion!
Therefore, it can be a smart decision to pursue a forex trading course to update yourself on the latest market trends and trading strategies. Read ahead to explore some viable forex trading strategies that can make you rich.
How do I select the best performing trading strategies?
Forex trading strategies depend on multiple factors like market behaviour, ongoing value of different currencies and economic turbulences. Additionally, the strategies would also depend on individual trading goals and resources available at hand.
You would require three primary criteria to rate different forex strategies based on their viability:
- Frequency of trading opportunities
- Targeted distance
- Allocated time.
You should also evaluate the risk-reward ratio of each strategy before utilising it for your trades. Here are some common trading strategies you can employ:
- Price action trading strategy: Price action trading strategies require you to study historical prices of different currencies to fix the trading start points. You can use price action as a stand-alone strategy or combine it with other strategies. These strategies are suitable for varying time periods including long medium and short-term trades.
- Range trading strategy: Range trading strategies are those where you identify the support and resistance points of potential trades and try to guess if other traders will place significance on these levels. These strategies can work well for markets that do not have any significant volatility or discernible trades. These strategies are also suitable for many time frames.
- Trend trading strategy: Trend trading strategies are great for trading beginners who have not yet gained experience of different markets. Trend trading strategies take the directional momentum of markets into account and generally yield positive returns. These strategies are good for medium to long-term trades and can be combined with multiple time frame analysis.
- Position trading strategy: Position trading strategies are essentially designed for long-term trades. Since they overlook minor market fluctuations, these strategies are best suited for trades that look at the broader market picture. These trades are more appropriate for experienced and persevering traders who can afford to incur small losses for better returns in the future.
- Day trading strategy: Day trading strategies are well-suited for traders look to make successive small trades within the same day before markets close. The trade times can range from a few minutes to some hours. These strategies require immense knowledge of the market and should be attempted only by experienced traders.
There are countless more strategies you can adopt once you gain enough experience in forex tradingd. Pursuing trading courses or tutorials can help you gain confidence in your trading skills and enhance them.
Invest in a good forex trading programme from a reputed trading school today to become a forex trading expert.