Hello, I’m Alex writing for fxmarketleaders.com, and today I want to talk about forex trading strategies.
Those who come to financial markets are often blinded by seemingly easy profits. You hear brokers telling you about big opportunities to make fast profits, thousands of dollars per an hour, but in most cases you will find yourself with your pens down and your pockets empty.
True, the forex market carries a great earning potential, and yes, you can make fantastic returns on your investment, however, in order to become a successful trader, you first need to have a trading strategy. In fact more than just one.
Now, the idea of a forex trading strategy might sound a bit intimidating, but in fact it is very simple. Some of the best forex trading strategies are so simple to execute, that anyone can trade according to them, even novices and inexperienced forex traders.
In this post I will introduce you to my favorite trading strategies, those that can also be applied in other markets such as the binary options market. One of the following forex strategies is aimed for more advanced traders, but the others can be used by anyone.
You should always remember that having your own trading strategy is an essential key to success, but is only one of the important factors.
It is time to reveal my favorite forex trading strategies!
1. Trend Trading – ride the next trend:
Ask any big shot Forex trader or investor and they will tell you they most often use the trend trading strategy. Smart, methodical trend trading strategy can lead to magnificent, consistent profits. Why is it so popular? You don’t have to be an expert to witness a massive trend. It is very easy for your eyes to see it on the charts. What are you looking for? You are searching for clear movement of the chart. For example, looking at the chart below, you can see a clear uptrend. This uptrend could have made you huge profits. Nice, isn’t it?
2. Range Trading – support and resistance:
If in Trend trading you wait for a clear upwards trend to appear, with range trading it is almost the opposite. You wait for the reversal to come. Don’t worry, it will be clear in a second. Looking on a chart, such as the Euro/Dollar chart, you will notice that most of the time, the chart moves in ranges, up and down, like waves. It is almost like you can draw 2 clear lines, one that connect the bottoms, like a ‘floor’ and another connecting the tops, like a ceiling. The ups and downs are how forex traders and investors make their fortune. The beauty of this forex strategy is that it relies on repeating patterns that will most likely stay in their ranges. It means that it is relatively easy to identify a trend, and even better, it is easy to spot an entry point, the point in which you jump in and ride it.
I personally really like this forex strategy, and I know that it is the most commonly used strategy by the traders and analysts at fxmarketleaders.com, a leading portal for forex trading strategies.
3. Breakouts Strategy – When support and resistance levels break:
Every range, channel or pattern has to break sometimes, right? Well, this is where the Breakouts strategy comes into action. This great forex trading strategy is very effective due to the fact that you can use very good and simple graphic tools to help you execute this trading strategy. All you need to do is follow a range or a channel, draw support and resistance lines like in the example beneath, wait for the break, and boom! Make some nice profits. This strategy usually involves great opportunities for high profits, but it is a bit more dangerous, as in many cases we witness false breakouts (when prices break the levels but turn back immediately), so you should have a bit of trading experience to know where to place your entries.
If you want to learn more on how to become successful traders you should read the fxmarketleaders.com trading guide, which I considered the most popular forex guide online.