Many newcomers to forex trading are often surprised to hear that forex trading strategies can vary widely from one trader to another and there is no one ‘best’ forex trading strategy.
In fact, I have often had people ask me which is the strategy I would recommend. The truth is there is no fixed answer.
Every forex strategy has its own pros and cons. As a new entrant into this field I would advise you to explore different forex trading strategies and see how they work for you. After a while you will automatically develop your own strategy that works best for your personality and your risk capacity.
A planned entry backed, by proper research and analysis always works much better than an impulsive approach where you just jump into the fray. With a planned approach you take calculated risks which in the end have higher odds of giving you good returns.
You will find that some traders plan their trading with the help of fundamental analysis whereas others use technical analysis. There’s no distinct advantage or drawback to either but I would recommend combining both of these when you are first starting out so you can determine for yourself which one is better for you.
Technical analysis charts give you an indication of support levels and resistance markets. The support level represents the bottom of the market and the resistance market represents the high price that very few traders will actually go beyond. Tracking these levels will give you a pretty good indication as to which direction the currency pair is heading towards so you can plan your FX trading strategies accordingly.
You will often see it referred to simply as SMA. In this strategy, you eliminate the fluctuations that a currency pair goes through and only take into consideration the average price that the currency pair reached during a specified period of time. This gives you a clearer picture of the price movements so you can plan your trade accordingly.
In this strategy, you minimize your loss risk and increase your profit potential by determining the value of a currency pair in advance.
This strategy is based on the minimum and maximum range that the currency pair fluctuated during specific periods of time. This gives you a general idea of what the currency value could possibly go to in the near future. This is the safest option for someone who is just starting out and I would highly recommend it for its low risk.
The only time when this trend may go contrary to expected is if there is some major news incident that has financial implications. When you are first starting out, I would advise you to explore all of your options and all the forex trading strategies. There’s good in all of them that you can capitalize on.
If you are not sure how any of them work or if you are not sure which one is most appropriate for you and you’d like some suggestions or advice, I’d be glad to help so just contact me and I’ll get back to you. Also, do take a look at our other related pages below on:
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