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Fri. Oct 30th, 2020

Five important trading strategies you must know

Having a good strategy is as much important as having a trading capital.You need both of them if you want to earn from trading. Having a strategy is not enough if you are not confident enough that you can make money from it. Different traders follow different strategies and it mainly depends on the personality of the trader and his preferred time frame. Forex market is the most complex and competitive market across the world and to survive in this market you need a good strategy. In this article we are going to suggest you few Forex trading strategy which might help you to make your strategy.

Trend trading

Trend trading is the most common trading style that traders follow across the world. There is a saying goes like a trend is your friend. As a result traders like to trade in favor of major trends and it is the safest way of trading. Forthe change in trend market needs very concrete reason otherwise it might change its way for some period but it will again start to follow the trend line. In this strategy trader often does not predict where reversal can occur so they just open a position and set a take profit and stop loss level. Trend trading is suitable for traders who like to keep open their position for a long time. Trend trading is not that easy that it sounds and it’s also risky because you can never know when the trend will change and if it changes then there will be no chance of winning potential profit from your opened position.

Range trading

A market is called in ranging condition when the market price line is moving based on support and resistance level. In this type of market, it looks like the market is going through a channel, and in this case, the market will try to form new higher highs when it is in an uptrend and form lower lows when it is in a downtrend. In this trading strategy traders just buy in the support level and sell in the resistance level. They put their stop loss and take profits according to that and even sometimes they put an advance buy and sell order in those places. This strategy requires the timing of your entry and if you miss the timing then you might not able to earn the potential profit. Check it out here and you will see many pro Aussie traders are posting their technical analysis at Saxo based on range trading technique. So, learn this method to earn more.

News trading

If you want big profits from a single trade then you must go for news trading because the market becomes insane when any important financial news comes out and if you can predict in which way the market can go then you cannot imagine how much you can earn from a single trade. In this strategy, your position will mostly be analyzed fundamentally which is the most complicated type of analysis that needs lots of experiences to have grabbed on that. But if you are not experienced enough then I will suggest you avoid news trading if possible because if you did any mistake in predicting market movements than you might face a horrible result.

Scalping 

Scalping is very popular between short time traders who like to get instant results. In this trading traders seat in front of their trading platform and open chat in a shorter time frame like 5 minutes or 10 minutes and start trading according to market movements. It is a very effective way of trading as you don’t need much analysis for making a trading decision but the main problem in this trading style that spread takes away most of your profits.

Retracement trading 

This is another popular trading strategy between traders who like to trade against the trend. When a major trend is going there are few when the market takes some breath and goes opposite the trend and after some time start to follow the trend again this is called retracement. Lots of traders like to trade in these retracement periods that they can have early results sometimes breakout occurs from this retracement level and starts a new trend. The main drawback of trading in retracement is you never know when the retracement going to end as a result you may always be able to earn potential profit from it.

These are the most popular trading strategy traders follow and if you like any of then try to study more about that strategy so that you can have a clear knowledge about that before you implement it in your trading.

 

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