If you want to get in on the budding Forex market, you need to start strategizing. A good, comprehensive strategy will help you get the most profit, with minimal loss. But choosing the right one is no easy feat…and you also need a trusted broker, but that’s a discussion for another time. So here are some of the more popular Forex strategies that you can take advantage of, and hopefully, have success with.
Working the Forex Market 24/5
Trading on the forex market happens all around the world, and it is active 24 hours a day, for five days straight. During the times of the highest liquidity, traders will turn to Asian, London, and New York sessions. The reason for it is that they offer high volatility and lower spreads.
Traders will also take advantage of the time overlap in the New York and London sessions because those seem to offer the most advantage. That takes place every day from 8 AM ET to 12 PM ET. So regardless of which forex broker you choose–here are some ratings–you can always focus on these high-traffic times when the markets are liquid. Essentially, traders don’t have to be active 24 hours a day, only pick the time that offers most volatility. Of course, that takes some planning.
Range Trading Strategy
The range trading strategy involves using technical analysis to identify key points in the market. These points include resistance and support, and the traders have to place trades around those specific levels. You can only use the range trading strategy on a market that shows no trend and isn’t particularly volatile.
One great thing about the range trading strategy is that it can work in any time frame. However, since breakouts are pretty common, traders also have to focus on managing risks. That being said, one of the best things about using this strategy is that the risk to reward ratio is extremely favorable.
Trend Trading Strategy
Almost anyone, no matter how long they’ve been on the forex market, can take advantage of the trend trading strategy. The main point of this strategy is using directional momentum to exploit markets and get positive returns.
Since trends can vary in length, the trend trading strategy doesn’t have a fixed length. It can last only a few hours or even take a few days. Traders that use this strategy say that there’s an incredible number of opportunities and business ventures, which make it really profitable.
Day Trading Strategy
As the name implies, day trading strategy is extremely short in length, and it lasts a couple of minutes or hours. As long as it all falls on the same day, it’s considered to be a day trading strategy. Of course, depending on a number of factors, you can have one or multiple trades before the market closes.
Just like with the trend trading strategy, one of the benefits of going this route is that you’ll have loads of opportunities. Also, the risk-to-reward ratio is pretty much down the middle, and there’s rarely a chance for a big loss.