Before adopting the best Forex Trading Strategies, it is very necessary for a person to know the real meaning of Forex and Forex trading. Foreign exchange (Forex) is the largest liquid market in the world where the transaction of one currency takes place and in addition to this, charging money for another currency takes place.
There is always a recognized market for the exchange of currencies between two or more countries in the world. Due to the foreign exchange market, forex trading exists continuously just because of the reason that one market closes whereas another one opens. Thus, by foreign trading, we mean, a type of investing where investors get the opportunity to make quick profits. The reason behind the profit is that only small changes take place in any of the countries’ currencies.
Steps to follow before start trading
- The very first step is to learn the basics of forex trading and know the terms thus used in this field that includes base currency, quote currency, exchange rates, long position, short position, bid price, ask price, spread and many more terms. The knowledge of all the terms helps you to read a forex quote so that you can bid and ask for the price conveniently. This helps you to decide the appropriate currency, which you want to buy or sell and you can also learn how to calculate profit.
- The second step is to open an online forex brokerage account by making a deep search and choose the right brokerage. You can also request to different companies for providing information about how to open an account and what are the documents, thus required. This way you can easily activate your account and become a part of a forex market to start trading with efficiency.
- Start analyzing the market by adopting technical, fundamental and sentiment analysis techniques so that you can determine your margin which depends on the broker’s policies. Then only you can place different orders in the market and you will find various ups and downs in the forex market. Thus, stick to your strategy and watch your profit and loss.
It is advisable to go with a demo account so that you can make a decision whether to choose a forex market as a profession or not before investing the real capital.
Best Forex Trading Strategies for making money
Forex Trading is risky at one time whereas rewarding at the other time. The person who is new in this field does not plan carefully which results in losing more money than earning. But the game for currency traders does not stop here as the people who have the guts to develop and maintain their own strategies can survive in this field.
Forex Scalping System:
The main aim of Forex Scalping System is to earn small profits from the deals after a certain period of time. It is one of the best forex trading strategies adopted by traders to buy a pair of currency and in order to wait for the profit, they hold for a shorter period of time. Thus, it involves a small amount of profit and a large amount of leverage even in a small change in currency. This type of strategy is automated or manual, depending upon the choice of the trader. In the automated system, the traders rely on software that educates them how to interpret the signals and what type of signals to look. In the manual system, the trader has to sit in front of the computer and look and interpret the signals with the choice of whether to sell or buy in order to earn profit.
Forex Hedging Strategy:
The main aim of this strategy is to earn money by making profits from different interest rates and price movements. In the Forex Hedging Strategy, the trader will buy GBP/JPY and sell CHF/JPY at the same time and the interest will be paid on the short CHF/JPY. The interest for CH/JPY is always less than when compared with the interest for GBP/JPY. There is a large difference between the rates and one can earn significant swap interest.
The Bladerunner Strategy acts like a knife whose edges are used to divide the price. The two conditions arise in this situation, i.e. the price is above the EMA or below the EMA. If the price is above the EMA, it will reject to the long side and if it is below, it will reject to the short side.
Daily Fibonacci Pivot Strategy:
The Daily Fibonacci Pivot Strategy deals with daily central pivot system which uses Fibonacci retracements in order to get trade entries. The preferred parameters are 38%, 50% and 62%. In this particular strategy, there are many possible variations and interpretations where a person can get better or even best possible rewards to risk ratio.
Thus, the choice of selecting the best Forex Trading Strategy depends on you.