If you are new to forex trading or are thinking of taking the plunge and starting to trade forex now, chances are you have realized that the best way to get started in forex trading is not to start blindly. On the contrary, it would be better to approach it with a strategy that will allow you to get the most out of it.
Especially if you’re not a full-time trader, understanding the market can be difficult. You will certainly learn a lot over time, but there is no question of starting out without having any idea what to do. To learn more about some of the key strategies you can use in forex trading, keep reading below!
Look at long-term trends
Given the fast-paced nature of the market and the fact that it is open 24 hours a day, you may think that you have to stay in the market for long hours to make a trade or that you have to invest a large part of your evening to succeed in the positions you take, but that’s not the case at all!
Due to the way the market works, if you find that you won’t be able to dedicate long time slots to trading during the day due to your job, then looking into daily or even weekly trends might be the way to go. to be continued. This way you don’t have to be constantly on your computer and you can concentrate on watching the market once a day for an hour for example.
1. Consider Day Trading
With day trading, the trader does not hold a position beyond the day. Thus, no position is left open overnight, with the risk of big changes within a few hours. Trades usually only last a few hours and the price bars on your charts can be limited to an hour or two at most. The day trader will focus on finding 2 or 3 good trading opportunities in a day.
2. Investigate the possibility of getting into Scalping
Scalping is a fairly fast type of trading, and although it is not for everyone, you may find that you work well under pressure and are able to make decisions quickly. If so, you might want to adopt this strategy.
These short trades sometimes only last a few seconds or minutes as scalpers attempt to take advantage of sudden small price movements in the market. Although you may spend more time in front of the screen, the actual trading time is minimal, and you may decide to focus on a very limited number of currency pairs at a time, which will limit your research.
3. Opt for positional trading
Positional traders, as their name suggests, tend to hold positions for longer periods of time, ranging from a few days to several weeks. Some positions can be held for months, and sometimes even years, as positional traders ignore minor market fluctuations and focus on the potential for long-term gain.
Although the pressure is not as strong as that of scalping, for example, it still requires a lot of discipline, because you have to decide whether or not to close your position at any time. It is considered one of the most advanced Forex trading strategies.
4. Getting into Swing Trading
This strategy may be suitable for a beginner as it allows you to hold your position for a few days. You can use any chart from H1 to D1 and it can include breakout trading, trend following and range trading.
This strategy is very advantageous if you are someone who can, or prefers, to analyze the markets in detail in your spare time and who is happy to hold positions for a few days, sometimes even more than a week. You will be able to spot trends and other things much more easily this way, and it will allow you to develop general trading skills, as you not only learn how to keep your position open, but also what market trends are.
Learn Forex Market Hours
If you trade in your spare time, you can make a few trades before or after work if you know when the currency pairs you are interested in are most active. You can also watch which currency pairs are most active at times that best suit your schedule. This can help you choose the best currency pairs to focus on, while taking into account your professional constraints.
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