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For some, forex trading is an easy way to generate large amounts of profit, but trading can also be confusing and complicated. Therefore, our approach to trading must be appropriate, namely by adopting an effective trading strategy and implement it properly, depending on the level of expertise, capital, and risk tolerance that we have.
Trading strategies can help to prevent the taking of positions at random, something is often done by trading the less skilled and experienced. A good strategy can also adjust market conditions and makes trading more regularly.
A large number of existing trading strategies should make us more selective against our choices and try these strategies through the demo account. The following is an example of a number of trading strategies:
1. Range Trading
This strategy is one of the simplest strategies, with expectations the price will tend to always return approaching the long-term average. The key to this strategy is a decisive turning point as the entry point, and for that, we can use technical analysis support and resistant, or with indicators and oscillator.
2. News Trading
The more interest, this trading strategy focus on actual news and developments of the economy and move the market are released every day. Opportunities at each release of data is important, but sometimes this approach is fairly volatile given the movements in the short term. The trader must master the timing and impact of the release of the data so that it can navigate the volatility and rake in profit from price movements.
3. Swing Trading
Swing trading is a strategy which makes use the end of a price trend. When a trend ends, the new trend is usually waiting to emerge and it is an entry point for swing traders. To that end, the trader must set rules (algorithms) taking a position using fundamental and technical analysis in order to identify the time taking the buy or sell a given instrument. This trading strategy is not suitable when market conditions ranging or sideways, given the tendency of these strategies hold positions for more than 24 hours.
4. Scalping
It has a negative connotation, trading in the forex world is one of the fastest strategies. Scalping strategy leveraging the price gap that emerges from the current order and bid/ask spreads so need speed. Scalper only holds positions in a short time with the volume low and the dodging movement is large, so that the risks can be minimised. With high-frequency trading, the scalper will prefer quiet market conditions and sideways, avoiding price movements are sharp and sudden.
5. Position Trading
It is the trading strategies trading strategy that is passive, using long-term charts to read the direction of the trend of the market, with periods ranging from daily to monthly. Given the long-term strategy approach, the position can be phased over the next few days to weekly or even monthly, depending on the current trends. The importance of the entry and exit points in this strategy poses a difficulty in taking a position on market conditions with high volatility.
6. Day Trading
Day trading is the most active trading strategies, which means a position opened on that day must be liquidated on the day. Regarded as a complicated strategy, Day Trading is often used by professional traders, market makers and investment expert, so for the novice trader education is required in advance.
In addition to adopting a trading strategy to suit market conditions, it is important for traders to maintain such strategies in order to remain consistent. The trick is to keep wayward with trading strategies that we select and does not change the trading strategies too often.
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