The Best Strategies in Forex Trading Revealed
Definitely, understanding various trading strategies is a must in achieving your forex trading goals. This could be the only way to generate higher returns as well. Devising a new trading strategy will be very difficult more so if you are just beginning to trade. Perhaps you need not do so due to the proven strategies that are created long before you’ve become familiar with forex trading.
Nonetheless, you must be very guarded of trying these trading strategies. If you’re not that confident in executing any strategy then don’t. You must not invest on a strategy especially if you are unsure of its effectiveness; it’ll only be a waste of time and money. Avoid scenarios like losing excessively just because of utilizing a strategy that you are unsure of.
Here are at least three worth-mastering trading strategies.
1) Turtle trading
This strategy was developed by Richard Dennis, one of the most popular and most financially successful traders. Turtle trading is a very unique strategy wherein a trader who wants to use this must buy a particular security when its value goes beyond the 20 day high and then, sell such security when its value goes beyond the 20 day low.
If you are going to execute this strategy, you have to ensure putting filters with each time that you enter trading. Also, you need to follow critical rules especially when it comes to exits, entries, positions and stops among others.
2) Chart patterns-based trading
Part of being a trader is to understand charts and to use them to your advantage. You could be very successfully if you know the common trading concepts that include head and shoulders, triangles, channel formation, parabolic curves, cup and handle and wedge formation. Understanding all of these concepts can make you become better at trading.
Some expert traders caution, nonetheless, that if you are going to use chart pattern you should master the process first. These concepts and thus, the strategy is perfectly feasible more so if you are passionate about learning this strategy. Expert traders can do it and so can you.
3) Divergence trading
Divergence happens when a specific indicator goes oppositely of the price’s direction. Simple. Divergence is considered as a sign for an impending reversal. If you can spot these occurrences, it will be easier for you to read what might happen. Thereby, you may gauge your expectations about the market on the following days.
Evidently, mastering these strategies will be difficult, but possible with continued learning and practice. No one says that this would be easy. What you can do is to read threads on various forex trading forums online. There are many of them. Surely, the users will offer practical and useful insights on how you can properly apply and utilize different trading strategies and techniques.
There are several trading strategies out there. What the profession requires is continuous learning about each technique and strategy to become a better trader and to improve profitability. While you may find a technique and/or strategy that you will comfortably use, it would be advisable to learn a few of them to have more options for future trading. Whichever you choose, it would be best to practice your chosen technique or strategy first.
The orientation of most beginners is to make money now. Some beginners jump into trading haphazardly while some draw inspiration from such a desire to learn a thing or two about trading and the most effective strategies, so that they will get immediate returns on their investments.
Depending on how you’ll see it, there is still a need for you to practice trading. For instance, you should trade using a demo account and trade for all you want. Your care must not be making money, but understanding how the entire system works. Develop good trading habits, if you must. After learning consistency and discipline, now is the right time to learn a strategy or two that will make you financially successful a trader.
Be reminded that it might take several months before you can make consistent profits when trading. If you are in dire need of money, then you might as well use the expert advisor which is a program (a robot) that trades for your account. Such a program is actually based on proven trading systems. Expert advisors are cost-efficient and will trade for you throughout the day. Observe how the expert advisor trades for you to learn the processes.