Popular Forex Strategies
In this section you will find the most common forex strategies which are based on fundamental analysis, technical analysis or a mixture of them. We have used the most popular indicators to build these strategies. Since these are the most popular strategies used by the vast majority of traders, they have a high ratio of success. Therefore, we advise that you read them thoroughly so you can learn how to apply them on everyday trading. This will give you the cutting edge when trading forex and will make the difference between winning and losing at the end of the month.
Trading in a volatile market is dangerous but there is the potential for huge profit opportunities. In order to make a profit in volatility trading you should pick the big levels, go with the flow and increase your targets.
The multiple time frames trading strategy is a Forex trading strategy that works by following a single currency pair over different time frames. By following the price chart we can see the highs and lows and establish the overall and temporary trend. However, by looking at the different time frames we can see changes and patterns that we were not able to spot by using a single time frame.
Many novice traders find scalping to be a very appealing forex trading strategy. The scalping strategy is an 'intraday' trading strategy and it allows for a successful trader to make a lot of money in no time. It is so appealing because it is a relatively low-risk strategy and can yield very big profits. Although scalping is considered low-risk, it relies on an attentive trader and can be compromised if emotions can get in the way.
A good way to understand support and resistance trading is to picture a man trying to get past a certain line with a fence blocking his way. He will keep going along the fence but will not be able to pass it. That fence represents the “support and resistance levels”.
Trading along the trend is one of the safest ways to trade and a great forex strategy for maximizing profits. FXML’s top analysts use trend trading as one of their leading trading strategies and always check which side of the trend they are on before making a trade or signal.
As traders, we have many things to take into consideration. We have to implement different factors and indicators in our analysis in order to succeed in this business, no matter if you trade short or long term. These might be fundamental indicators, technical indicators, or both. One of the simplest indicators is the moving average (MA). It is easy to interpret and can be placed on the chart so you don´t have to make calculations.
The comments of the Central Banks set the tone of the market. You can trade the comments by scalping, short-term trading and/or long-term trading.
Trading the Central Banks can be very profitable. The main strategies are trading the expectation, the knee-jerk reaction and the main event.
Trading your logic or trading the market? Sometimes, the price moves stubbornly against the technical and fundamental analysis. We can still trade profitably, either by going with the flow using short-term forex signals or against it using long-term trades.
Recently, we have seen a lot of irrational price action in the forex market. But the market always hints which direction it wants to go, so during these times, it´s better to let the market be your guide.
Hedging strategies consist of going short and long on two positively correlating forex pairs. Man Group uses this forex strategy with great success.