strategies

What are the strategies in the Forex market?

April 14, 2019

 The article is designed for those participants who own the basic principles and understand the basics of the Forex market . The currency exchange offers several options for the trading process: in the long-term, medium-term or short-term. Each individual participant will have to choose a strategy individually. But before deciding on the Forex strategy, it is necessary to thoroughly examine all the distinctive features, evaluate the features of each individual strategy and understand which mode is the most suitable and which is undesirable.

 It must be borne in mind that success and some stability with respect to income in the Forex market are allowed only if there are three postulates: trading strategy, basic knowledge and ability to control your deposit. It is impossible to count on high rates of profit without having your own tactics or plan.

 Almost every participant who, opening a new position, is guided only by intuition, initially condemns himself to failure and financial losses.

 In order not to be disappointed and not to replenish the lists of bankrupt Forex market participants, it is necessary first of all to think over and plan their next steps. A clear plan (strategy) is needed, which will act as a kind of manual, instruction, and in no case is it advisable to experiment, especially during the trading process.

 The trading mode determines the duration of the positions being opened and based on this key parameter, we can safely distinguish three strategies that differ in the time interval .

Basic Forex Market Strategies

1. Short-term trading mode on Forex :

 Most often, it is the short-term Forex strategy that is the most common direction among beginner level participants. The reasons that encourage traders to choose this particular trading mode several.

 First, the intraday strategy does not accept deposit restrictions, therefore, regardless of the size of the initial capital, you can engage in trading.

 Secondly, it is this Forex strategy that has a high yield growth. However, it is desirable to constantly monitor short-term positions; otherwise, any sudden trend jump may unfavorably reflect on the final result.

 In addition, we should not forget that when choosing such a strategy, you must first thoroughly familiarize yourself with the analytical tools, thanks to which you can conduct a thorough analysis. Nevertheless, despite the obvious advantages for beginning Forex market participants, this is an extremely difficult strategy, therefore it is better to use other trading modes .

2. Medium-term strategic tactics at Forex :

 A characteristic feature of the medium-term trading regime is the ability to open a position for a longer period, which allows for the transfer of the transaction to the next day. A more acceptable option for non-professionals, novice Forex traders, because it has an optimal ratio of risk level and profit growth.

 But you should not relax, because there are difficulties for correctly determining the most successful opening and closing positions. In order to correctly determine the entry and exit points, the trader will need to carry out a thorough analysis using technical and fundamental graphs and analyzes. In addition, on Forex it is recommended to constantly use a candlestick analysis, which will help to inform the trader in a timely manner about a sharp change in the direction of the trend.

3. Long-term Forex trading strategy :

 Choosing a long-term Forex strategy, the trader is given the opportunity to hold one position for up to a month. This option of trading is ideal for those traders who are not afraid of analytical studies and are willing to take risks for a long period.

 Unfortunately, a long trading period requires huge financial investments, which not everyone has. Before choosing this mode in the Forex market, you should consider this key factor. According to the rules of money management, it is not advisable to open long-term positions using more than 20% of the total deposit funds.

 Only after determining the Forex trading strategy can we safely move on to creating our own rules, which will further help the trader to improve in this area.