Everyone who gets involved with forex trading is dying to know which strategies are going to help them make the most money. There is a reason why there is so much money going around the markets every day, people want the chance to win big. While this is going to be the main goal for any trader, there are some things that need to be considered before choosing a strategy.
Not every strategy is going to be applicable to every person and every situation, as each one is unique. As the majority of people will be part-time traders, some of the plays that the full-time traders go for just wouldn’t make sense. As well, it is going to depend on if you use an ECN broker, your knowledge, and your end goals.
Understand Which Markets to Use
Before you start settling on a particular strategy, you must first understand the different markets, what time they are open, and the major trading pairs that they offer. Even though the forex markets never close, if you want to get in on the main action it is important to trade when your desired pairs are active.
You can easily plan your trading strategies around the time of day you are able to trade, and correlate with which markets and currency pairs are most active at the time. By doing this you are going to ensure that you have a lot of action when you want it, and it leads to more efficient trading.
Long-Term Trends
This is a pretty basic strategy that is going to work for a lot of part-time traders and full-time traders alike. The goal here is to monitor and study the activity of certain pairs to see which direction they have been moving in. You are going to hold onto your pairs for longer time periods, days, or even weeks, instead of actively trying to cash out.
By doing this you can have a fairly good chance of realizing a profit over time, and you have the ability to cut your losses if things start going south. While this may not be the type of action some traders are looking for, it is a proven strategy that can work for you.
Price-Action
This type of trading is going to work best for those traders who like to do their trading in short bursts fairly frequently. It starts by analyzing the technical data from a set of currencies, and trading based on the trends that you see. You are going to want to try to spot the highs and lows that are greater than the norm, as these will be the areas to focus on.
To get the most benefit from this type of trading you are going to have to figure out which markets and pairs will work best with your schedule. Your trades are going to need to be timely, based on trends, so this is going to take some good scheduling. Price-action trading is very popular for a reason, as when it is done properly, it will pay off.
Scalping
Another common method of making money trading daily is through scalping, which sees you opening multiple positions and closing them each day. You are basically looking to gain smaller gains and cash out quickly so you can move on to the next one. This method is not going to see you make massive profits from one trade, but it can add up over time.
There is No Perfect Strategy
The one thing that any forex trader needs to realize is that there is always risk involved, and there is not going to be a perfect strategy. There is a reason you can look at an Australian forex brokers list and see so much competition, as everyone is trying different ways to manipulate the markets, and nothing is carved in stone. Make sure to take your time, learn your markets and pairs, and stick with a strategy that works for you.
Author’s Bio
Cornelia Ekong
Digital marketer at 55brokers.com
