There are so many Forex strategies which a trader can use for his operations. However, experts make it very clear that selecting a simple strategy pays more dividends than one which is complex. A simple Forex profit strategy always performs better. Their ease of use makes them robust in nature and appropriate for handling any sort of market situation.
For those who want to know about the best profit strategy in Forex, here are some names which they can make use of.
- Carry Trading:
It is one Forex profit strategy which, though cannot truly be considered as a strategy for beginners, is downright difficult. The basic point of carry trading is to trade the profits which result from the difference in 2 currencies.
Example – Say a trader borrows Japanese Yen (JPY) but due to its low ROI, the cost of sticking on to that debt is quite negligible. Now, if that trader converts JPY into Canadian Dollar (CAD) and invests in a govt bond of 0.8%, the interest received will surpass the cost required to fund the Yen’s debt.
However, some complications are there and that is why experts always suggest opting for low currency pairs. Also, one should keep an open eye for global currency interest rates, especially since the ROI differentials seem to be narrowing down with every shift in phase.
- Breakout Trading System:
Every trader wants to interpret market breakouts. Simply put- the point when the market behaves being normal and reaches to newer heights or lows. Experts state that before a new trend occurs, a breakout point will take place first.
One easy long term profit strategy in Forex is using the 20 day Moving Average and checking how the price behaves.
If the price does break over the 20 Day High period, it signals a buy.
Again, when the price breaks below the 20 Day Low period, that implies traders a sell signal!
There is one more catch to it. The strategy is very easy but it also involves occurrence of some false signals. Plus, during times of new highs, there could be a chance that no fresh uptrends or downtrends might take place.
- Trend Trading:
Possibly the simplest Forex profit strategy for traders is trend trading. This means interpreting the price directions which move for specific market situations and then trading in that very direction of the trend. Experts always state that trend is a trader’s friend; so, when plotting the chart, one should keep an open eye on where the trend is heading off to.
These are some easy to implement strategies which traders can make use of without issues. However, to really find out which Forex profit strategy is ideal according to one’s own needs, demo trading proves to be important. So, find a reliable broker who is offering MT4 and sign up for a demo account now. Formulating strategies and that too a reliable one is pivotal for profit acquisition. With these practice accounts, one would surely be able to do that freely without the fear of losing money.
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.