When you learn how to trade in your first time, you might think about the best forex trading strategy that can produce large profits consistently. Thus, you need to understand some of the existing forex trading strategies and their advantages and disadvantages.
Check out these forex trading strategies that suitable for novice traders
Position Trading
It is also known as long-term trading. This strategy is implemented by traders who want to take advantage over a long period of time. A position trader usually opens trading positions weekly to monthly basis.
By using that way, a position trader does not need to monitor daily price movements and does not need to watch the market every day. You only need to observe trends in the long run. However, this technique requires large capital because the fluctuations that arise will also be large.
In addition, you must really understand the fundamental conditions of the currency pair so that you do not place the wrong position.
Swing Trading
You can use this strategy to implement in the medium term, or in a matter of days to weeks. A swing trader looks for patterns of movement in the form of reversals or reversals in price direction, with the hope of putting the best buy and sell prices to maximize profits.
With this strategy, you don’t need to keep abreast of market developments. In addition, opportunities for profit are abundant, because reversals often occur.
Day Trading
Most novice traders often use this kind of strategy. The traders within a period of several hours each day. Thus, you do not need to do fundamental analysis that is too deep. In addition, there is no overnight risk because the position is closed at the end of the day.
However, because it utilizes price movements that change rapidly, a day trader tends to spend more time watching price movements every day. In addition, you must also observe price changes at all times to ensure you do not lag behind the best price movement momentum.
Scalping
If a day trader opens a trading position every hour, the scalper traders even every minute. You should place a large amount of capital in a trading position that is only opened for a few minutes.
The advantage of this technique is trading time is very short, so you don’t need to linger over to monitor price movements and relatively instant profits.
However, to achieve profit, you really need to be sure of the direction of the price of the currency pair that you choose. This requires very high analytical skills and experience.
By looking at the four trading strategies, you can choose the trading style that suits your trading abilities and objectives. According to FX Empire, you won’t know how the strategy works if you never try it. Thus, the only solution is to try out the leading strategies for yourself and see what actually works.
Additionally, you have to make sure that you understand all the risks that may arise from certain trading strategies. Thus, you can prepare a risk management strategy that can minimize loss and maximize profit.
Read more : Moving Average Strategy, The Simplest Strategy
