Trading strategies and personality of a trader
Do you know a person who has never ever searched “the best Forex trading strategies”? It is unlikely that there are any of such people. It is difficult to find your own style in trading without ups and downs. People try to base on the experience of the successful people as they lack practice and have problems in choosing reliable trading methods of their own. What can they do? They can adopt experience of the other people and rely on experts. We will follow this way too.
The best trading strategies for a beginner in Forex are based on the main trading patterns of the currency market.
Of course it is perfect to have your own unique strategy, but any trading method should be based the classic strategy. Depending on your personal skills, experience in money management, desire to earn money and the degree of risk you can take, you will choose the most suitable for you trading strategy.
What trading strategies are there in the Forex market?
Today we review four most popular trading strategies. The best Forex strategies include basic patterns and methods of trade in the currency market.
The best trading strategies are:
- Technical analysis
- Impulse keeper
- Intermarket spread
Method of technical trading
For those who are interested in earning money fast, this strategy is the best option of trading in the currency market. The strategy is based on the use of indicators and charts. Evaluating the company, stocks or currency pairs a trader predicts future change in price on the chart with plenty of signals and patterns. Moving average lines, the levels of support and resistance and other indicators help in making the right decision. However, this strategy has its drawbacks. Trading with the use of this strategy involves many indicators, which can be faulty.
At a snail’s gallop! The purpose of scalping is to make a large number of small operations, which all together will bring big profit. To some extent, in scalping the result of trade depends on chance. However, a trader does not need to be involved in the market development, or to understand principles of market mechanisms. A trader just shall trace minor movement in the pairs and place trades throughout a day. As scalping is a one-day trading and a trader does not transfer positions for the next day. Scalping can be viewed as a non-professional trading; however, we should admit that it is safe and can bring high profit.
This strategy is based on market impulses; you identify trend of the price movement and buy at the period of lows and sell at the period of highs.
The idea is that the selected instrument, which has demonstrated decline on the chart, will continue to fall, while the growing instrument will continue to rise.
For this strategy you will need some skills of analytical thinking and a few dynamic trend indicators. Note, however, that you can encounter difficulties: using this strategy you bear some risks, as the price movement is affected by numerous factors. If a trader does not take into account all of them, the lows can turn out to be not the real lows and the price will continue to fall after you have made buy transaction.
You open two positions: a short and a long one on the different but closely related instruments. It is important that the instruments shall be interrelated. To achieve the best results you should trade in different markets using futures. This strategy is suitable for the real experts, as it is very complex.
I hope this article will be helpful for you. Read more about trading in the currency market and you will feel more confident in the world of Forex industry.
Good luck in trading!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.