In comparison with binary options the trade with currency pairs is rather complicated, though the technican an fundamental analysis is also used here. There are hundreds of Forex strategies and they are based on different mathematical, technical and economic rules.
What you should know about Forex trading:
- there are no win-win strategies. There is no such strategy that would be 100% reliable, and would give a guarantee of winning when it is constantly used. The success of the strategy is influenced by many individual factors to predict which is not always possible;
- there is no such division strategies as “for beginners” or “for professionals”. There is a functionality, which is simple in execution, are complex, but all strategies can be effective in varying degrees;
- the fact that the strategy works for one person doesn’t mean it will work for another. You can compare it with the tool: the drill can be one and the same, but different people use it differently, getting different results;
- the more a trader knows the strategies and can use them, the greater the possibility that he will be able to make a profit.
A huge number of strategies in Forex trading is due to the fact that every trader takes as a base the existing material and modifies it for himselfs, thus creating a unique model of behavior, able to generate an income in different situations. We recommend you to get acquainted with the theory of at least a dozen of strategies, test them on a demo account and try to develop something on your own.
Types of strategies in Forex trading
Strategy “Sidus”, “Minesweeper”, “Green Fire” – there are a lot of names mentioned on the Internet. Someone offers their patterns of behavior in the foreign exchange market for free, and someone sells them for very good money. Indicators, stops, spreads and other do not always understand the termsand can easily confuse the novice investor. We suggest after selecting a broker, to immediately pay attention to educational webinars, trainings and materials. If, after a deposit you have a personal advisor it is even better.
Types of strategies:
- According to the trading period:
- the short-term. Scalping Forex trading involve closing a position within minutes. Classic ones consider the time period of 1 day. The trader waits for the moment of the price movement, open a position and rising (falling) profit breaks for a few hours. Convenient after gettuing news;
- the medium-term. The position is held in the market for several days, but closes before the weekend. Conservative strategy, but very profitable;
- the long-term. Can stay in the market for weeks and months. Recommended for illiquid currency pairs.
- By risk level:
- aggressive (risks are maximum but the income is too). Applied when trading in small amounts and in the short term.
- By the type of indicator or graphic model (pattern):
- indicator-free strategy;
- graphical strategy using shapes;
- strategies based on moving averages;
- tactics based on the Bollinger bands;
- models based on the analysis of Japanese candles;
- the strategy is built on the basis of other indicators.
- By trading volumes:
- the strategy of Forex trading using martingale tactics (a technique that involves the doubling of the lot at the following rates, if the previous bid was unsuccessful);
- techniques that do not affect lot increase.
- By the ways of trading:
- A trader analyzes the market and decides to enter the market;
- semi-automatic. The investor can use the scripts (add-ons) that allow you to analyze the market;
- Trade is conducted with the help of robots-expert advisors. Advisers are not suitable for all platforms, and terminals such as MetaTrader 4, allow you to program (create) their own advisers.
Some recommendations on choosing Forex trading strategies:
- short-term strategies for beginners will most likely take a loss. Less risky are considered to be medium-term tactics, they also allow to define their model of trade;
- on the early stages it is to risk only the minimum lot. You can also obviously lay the loss of the budget on testing the different strategies to understand which is better;
- it is recommended to select a broker offering the trading terminal with the most advanced tools and the ability to add additional indicators;
- tactics based on the method of martingale is highly risky, and are not recommended as wagering;
- you can take advantage of social trading by copying the trades of more experienced traders or the opening opposite trades that were unsuccessful. But it is also risky because a delay in opening a position and closing can cost the trader a profit.
Which strategy to choose – is up to you. Open demo account, practice and make a profit!