What are the best forex trading strategies ?
Forex trading is preferred by large number of traders because of its ability to offer high returns and is largest market in world.This market is open for 24 hours and traders can trade anytime they want to.Risk involved with this type of trading is also high, currency tips as recommended by experts having good knowledge of forex can be considered for better management of risk and returns. Trading in currency can be in any number of pairs.Traders as per their risk bearing capability can decide in how many pairs they want to trade.
Although there and various different strategies which are used in forex, some of the most frequently used are discussed below:
1)Trend Trading – In forex there are three movements: upward, downward and sideways.The base of this strategy is that price often moves in a trend.Traders who trade along trend gets benefited when market is following upward or downward trend but also suffers when price becomes stagnant.Traders have to be careful with indicator they are using here, as generally trend indicators are lagging indicators.
2)Basket Trading – Basket traders see various charts simultaneously and their decision is based on multiple inputs.They trade in single or multiple currencies at the same time.While using this strategy it is believed that there is some kind of correlation between different currency pairs.Here also lagging indicators are used by traders.
3)Trading on fundamentals – Traders closely pay attention to change on different economic indicators like inflation, interest rates while trading on fundamentals.They also study news events and then identify trading opportunities.
4)Trading on technicals- Traders who trades on technicals try to identify potential buy and sell levels by referring charts and graphs.A very good knowledge of forex market and its related terminologies is required to perform well using this strategy.
5)Range trading strategy- This is most simple trading strategy among all.Traders buy a currency which is on sale and expects thats its valuation will regain its position on long term average.Often this strategy is referred to as mean reversion.Beginners or traders who are new to forex trading are comfortable using this strategy.
Traders should always use strategy which they fully understand and find comfortable to use.To become successful forex trader, a disciplined trading practice has to be adopted.If you are a new trader then the very first thing you should do is learn about market from all possible sources and before trading in real time fist practice trading using your demo account. This will help you in identifying your mistakes which you can avoid committing while trading in market.Other then forex, traders also prefer to trade in commodities like gold,silver.On mcx these commodities are most popularly traded.Such precious metals are highly liquid by nature and protect against inflation condition as well.To ensure profitable returns, services like mcx tips , trading tips, currency market tips are also used.Be it commodity or forex market , traders need to have good patience while trading and never involve themselves in wrong trading practices for earning quick returns.