Investing in Forex is a great opportunity for short time investors as well as long term investors. Trading Forex without any strategies is like playing football match without any strategy or game plan. You should also never enter into Forex trading until you have proper strategies to increase your chances of success. The price fluctuations in Forex currencies are great and sometimes the movements go in favor of you and sometimes it goes against you. All you need to have effective strategies in place in order to maximize your chances of making your trade favorable for you. We will describe some important Forex strategies which can help a beginner in the Forex world to maximize their returns on investments and get settled as a successful Forex trader. These strategies are easy to follow and can help you in producing significant profits if done correctly.
You should always try and test your strategies on a Forex demo account first and open a demo account with a renowned broker in your area. This will help you to first check how effectively you can use your strategies as a beginner. Once you are comfortable with these strategies you can create a live account with the broker of your choice and start earning real profits.
Forex currency analysis Forex strategies
This is a great method of predicting the future movements of the market and the fluctuations in the currencies. There are two methods of currency analysis and they are known as Technical analysis and Fundamental analysis. Technical analysis takes the help of charts and indicators and uses the historical data of price movements to predict a trend in the near future. This method is very common in the world of Forex and the people using the technique are called chartists.
Fundamental analysis takes into consideration the external factors which impact the movement of the price of the currency of a country. These factors include Gross domestic product, Unemployment rate, socio-political conditions, interest rates and others. These factors have major impact on the price fluctuations of currency related to them.
Day forex trading is among most common Forex strategies and more popular one. You do not hold any trade position overnight as a day trader. In this you make multiple trade orders in a day and close your position before the day ends for trading. Currency fluctuates through a day and even if these fluctuations are small you can make significant profits by opening multiple trades in a day. But the amount of capital required in day trading is more since the fluctuations are smaller in a day.
In this strategy the trader studies the average fluctuations of the currency in target and identifies the support and resistance levels. The trader opens and closes trades based on these levels in range Forex trading. Although the profits generated using the range trading Forex strategies is not so significant like the other mentioned above, the consistent use of this strategy can make you reap the profits on a longer period.