Forex trading is an industry with a lot of liquidity behind it.
With over $5 trillion being traded on forex exchanges every single day, serious money is flowing as traders like yourself look to make an income.
But it isn’t without risk. In fact, the average forex trader is actually bound to lose money rather than earn it.
But with the right forex strategies in place, even a beginner can try their luck in these fast-paced markets. We’re going to help by giving you the top 5 forex strategies to help you get started.
Get in, get out. That’s the purpose of scalp trades, and it’s one of the forex strategies best suited for new traders.
You’re making trades that only last perhaps a few minutes to skim profit off a moving market by buying/selling a currency and then doing the closing the trade a few pips above/below.
You can set stop losses to automatically close your trade if it goes the other way, while giving you practice to experiment.
Day trades target bigger moves in the market than scalping (although scalping is, technically, still a day trade, just in a smaller timeframe). Day trades are often left open in the markets much longer, but close by the end of the day, hence the name.
Because of the movement possible over a longer period of time – several tens of pips – you could make much bigger profits as a day trader. Of course, the flip side is that you could also make far bigger losses, too.
Swing trading involves a longer time frame – potentially over several days. By looking at trends in the market, you can analyse when the market turns the other way and profit from the result.
With trades open for several days, your money is going to be on the market for some time, so you have to be calm if you find the market turning away from where you hoped.
It’s a useful strategy for those who don’t have the time to monitor the markets constantly.
Positional traders take advantage of weekly or monthly trends in the market, which is perfect for new traders who are looking to take a much more hands-off approach.
If you’re expecting the market to head downwards, take advantage of it. Set your trade up and watch the market go up (or down) and profit from the results over a much longer period of time.
But be careful, because the market can just as easily turn against you.
Quick trigger finger traders are probably more suited to momentum trading, closing or opening trades when a push in the market forces it to goes up or down.
Momentum traders use these short-term trends to make successful trades in markets that are ready to boost upwards or shoot downwards.
If you’re looking for software to help you judge when you should be making successful trades like these, why not take a look at our list of paid forex indicator tools?
Try Out These Forex Strategies Today
Forex trading isn’t for the faint-hearted.
You need to have a careful risk management strategy – greed won’t help you here, so be sure that any losses you make are well within your tolerances. Keep the rules of your strategy in mind, and don’t let your trades be overruled by emotion.
Looking for more advice? Download one of our forex trading courses for more advanced help and information to help you become a more skilled trader.