Forex trading looks quite difficult in the beginning. A good forex trading strategy is key to entering this field. We all know that forex trading is the biggest financial market around the globe. The average daily trade volume of FX trade is approximately $6.6 trillion.
The Definition of Forex Trading Strategy
It is defined as the set of rules or standards to help traders enter the market. How to manage it and when to close it? A trading strategy may vary from trader to trader, and it may be simple or complex.
Common Forex Trading Strategies for Beginners
1. Strategy of Price Action Trading
The strategy used to make decisions on the price movements of certain articles is called the price action strategy. Numerous price action strategies are available, from breakout to reversals. Technical indicators have no significant use in price action strategy except for the supportive role. Also, check what is margin level in forex?
2. Strategy of Range Trading
A range trading strategy will help traders look for instruments that consolidate a certain range. According to the timeframe, this range could be from 20 pips to several hundred pips. Traders can use this tactic to look for non-trending instruments. Lower the ADX value. Weaker will be the trend.
3. Use of Trend Trading Strategy
Trend trading strategy helps to identify trading chances in the ongoing trends. The trading instrument tells the direction by moving in the direction of ongoing trends. An uptrend indicates a hike in prices, while a downtrend shows low prices. Supporting tools also help to identify trends.
4. Strategy of Position Trading
Position trading strategy, make use of profits from long-term trend moves and ignore short-term trend moves. This strategy uses the traders holding positions for a week, months, or even years. Like Scalping, it is a very difficult style of trade. A trader must remain disciplined and calm in all conditions.
5. Strategy of Day Trade
Day traders don’t trade for seconds. They generally focus on a specific session or time of the day. Scalpers use only the M1 chart, and day traders can use charts from the M15 to the H1 chart. Scalpers can open 10 trades a day, while day traders are slower and use 2-3 good opportunities.
6. Swing Trading Strategy
The traders use a swing trading strategy when they want to keep the position for many days. They can use H1 to D1 charts. This type of strategy requires the traders to be patient and more disciplined. You might have to wait for a day or two or even a week for a good opportunity to rise.
7. Scalping Strategy for Beginners
In Scalping, traders take advantage of small moves in price during day time. This duration may be of seconds or a few minutes. Scalpers need to be attentive to make quick decisions. You don’t have to hold your position overnight or for longer periods.
This article describes a guide of strategies for beginners regarding forex trading in 2022. It emphasizes that new traders follow these strategies to build a shining career in forex trading. The strategies discussed above are quite helpful in this regard.