Often, rookie foreign exchange traders get demoralized when they read the thousands of pages of content available on difficult strategies. So, they just quit the idea and go back to trading low leverage equity. By doing this, they miss out on all the great profit this market provides.
However, if learners try any of these best Forex trade strategies, they will definitely get some idea about things. This will interest them further in trading currency pairs.
But, before we get into the strategies, let’s look at the broader perspective called Price Action.
What is price action?
It is a Forex system that basically relies on the price trends. To complement it better, some use other indicators, although the effect of trends on trade is maximum. Because of its easy usability, this is often the first system most learners of best Forex trading strategy use.
Here’s a look at some important ones:
- Trend line Strategy
In this strategy, traders have to draw a trend line both as a resistance and as a support.
What is support and resistance?
Resistance is the point in the chart which stops the price action from going above it. Experts plot trend line by looking at price charts over a period of time, especially the kind of period traders are looking to trade in.
Support on the other hand is the point in a price chart that stops the trend from going any further down.
In trend line strategy, traders have to use the two lines and try to buy at support and sell after resistance breakout. A trend performs a breakout when it moves above the resistance line and goes further ahead. This is one of the simplest and best Forex trade strategies that even pro traders use.
- Downward Trend line Strategy
Best used during an ongoing down trend in a currency pair, traders identify the right time by finding decreasing breakout peaks in a chart.
Traders have to plot a line using two or more decreasing peaks and wait for the price action to go above the downward trend line. As soon as this happens, they can make a buy a few pips above the trend line and sell when it reaches their desired take profit.
If a trader plots a downward trend line at 1.5000 pips, whenever the price breaks out reaches above it, buyers should buy and ride the wave to the desired profit.
It is the easiness of downward trend line strategy that makes it the best Forex trade strategy for learners.
Some things to keep in mind:
After implementing these trading strategies in your deals, don’t make a learning stop there. Instead try to learn more about intermediate and advanced strategies to get into trading full time. Also, once you get an idea of different strategies you can use some of them combined with other indicators to make your own best Forex trade strategies to become a better trader.
For now, you can try these out and get a hang of things to get more into foreign exchange 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.