Trading forex has become the go-to way of making money online for many people. Different people have different approaches to forex trade.
The aim of everyone is to be able to make a profit. How do we trade forex? Which are the best strategies for forex trading? These are some of the questions that every new entrant into the forex trading scene is always asking.
If you’ve been asking similar questions as well, read along and learn a thing or two, about forex trading.
Here are our top 10 ways of trading forex.
1. Markets Charts Analysis.
Your broker is going to make available to you’re the forex market charts. You have to be able to read and interpret them. It’s called technical analysis. This analysis should help you make predictions about where the market is headed, and how you expect it to behave within a certain period.
Swinging involves long term traders. It involves taking a long term position, anticipating that the price of the currency you’ve taken is going to rise at some point so that you can exit. Swinging trades usually run for days or even weeks, you can keep the position going until you have the best time to exit.
3. Trends-Based Trading
The trends-based strategy is based on looking for patterns and specific conditions, that confirms that a currency is going to move in a certain direction. You can pick up patterns from the charts, or observe the price movements.
4. Using Trade Zones
Trading zones involve enclosing your trading within a certain area on the forex charts. Creating a trading zone, involved focusing on a particular section of the charts, where you are feeling most comfortable with the market movements that are happening.
5. Volume Trading
Volume trading is a technique that is used to monitor actions by large banks and corporations with massive liquidity. Their actions cause significant movements in the market. Volume trading involves checking the level of trading volume, which is an indication of how much currency is moving on the market. It can help you make some predictions.
Scalping is about short-term or quick trades. It is about entering and exiting positions in quick succession. Traders do this to try and capitalize on taking winning many small trades, and therefore end up with a significant profit.
7. Arbitrage Trading
Arbitrage Trading is more like volume trading. It is about being keen about the actions of the big boys in the forex market. That is the corporations with massive liquidity, which cause huge movements in the market. The difference in currency prices that these large players have will give you a good idea of what to expect.
8. Position Trading
Position trading is yet another long-term trading strategy. It involves taking a position but deciding your exit point before committing to the trade. It is used to leverage for maximum profit, or when you are confident that a certain exit point will guarantee you some profits.
9. Day Trading
Day Trading is the kind of trading most traders hope to become experts in. It involves spending your day at your desktop or laptop screen seeking trading opportunities. Day traders hope to place many trades throughout the day, and possibly count a good profit at the end of their trading day.
10. News Trading
News trading involves leveraging your predictions of the market behaviour on news and current affairs. Social-political affairs have a huge effect on the performance of the market. News traders use the news to try and anticipate how a certain currency is going to behave. News trading is best suited for long term trading.
You can use any of these strategies, or any other strategy that you can come up with. As mentioned in the beginning, different traders have a different approach to forex trading. You can use one or more strategies to trade. Most seasoned traders combine a number of strategies in a bid to be more successful with their trades.