Forex market is right now one of the largest financial markets due to the rapid growth of the internet, which welcomed traders from all across the globe. Well, one can’t deny the main reason behind this enormous growth of forex trading i.e. effective strategies available for millions of people on the Internet.
It is only the strategy that empowers the trading skills and boosts the confidence of advanced-level traders to trade in higher volumes and earn higher returns. Forex strategies are crafted specially to withstand the ongoing trend by sticking with a plan complemented with the forecasting using multiple reliable sources.
So, no wonder that there are hundreds of strategies for different trends, currency pairs, and different types of trading. Choosing one of a hundred is a tough task for a beginner, but here are the few common, effective strategies that can surely help you in the present trend of your chosen currency.
- Carry trade strategy
The carry trade strategy is one of the most common yet popular forex trading strategies that every beginner and intermediate executes. In this strategy, the trader chooses a currency pair considering different factors and buys a currency in them with a lower price expecting a higher alteration in the price margin.
It may seem simple and mostly similar to stock markets, where an investor buys stocks at lower levels and sells them at a higher rate of returns. Traders execute this strategy when the market is running low but the sources conclude an increase in the price.
- Forex Trading Strategy Arbitrage
This is one of the oldest strategies which is more of speculation where the trader intends to make profits from the loophole of the financial market. Although there are lots of factors to consider and require a lot of experience, if executed well, this strategy takes the benefit of difference in the price of global currencies.
For an instance, a trader chose a volatile currency pair, buys one currency, and sells it in another market to earn profits from the difference.
- Time Frame Charts Strategy
As the name suggests, this strategy is based on the time frames that one can set on the charts displayed in every currency pair available on trading platforms like https://www.blackstonefutures.co.za. Most traders who rely on technical charts go for higher time frame charts that contain accurate data using which forecast can succeed to a great extent.
- Hedging Trading Strategy
Hedging works by initiating on both long and short positions using a single chosen currency pair. This reduces the risk of losing money irrespective of the movement of the price margin of the currency. You can either lose, win, or even out making it a safer choice than relying on a single position and depending on the forecasting entirely.
- Scalping Strategy
Scalping is the short-term strategy that most forex traders are well familiar with. In this, the trader makes multiple trades throughout the day to make small profits consistently to get an overall higher return at the end of the day.
Many indicators, auto trade triggers, and advanced algorithms are used on the chart to alert the trader throughout the day when the right move comes in the trend. Besides, the stop losses are kept minimum to limit the losses as much as possible. This strategy ensures a safe game in every market condition as the trader quits either with good profits or limited loss on every small trade.
- Fibonacci Retracement
Several Fibonacci tools are present in all forex trading platforms that works on the Fibonacci numbers i.e. 0.236, 0.382, 0.5, 0.618, 0.764. The retracement strategy works with all those numbers and tools by considering the resistance and support levels based on the ongoing and past trends in the price margins of the chosen currency pair.
- Divergence Forex Strategy
Divergence is also one of the most popular strategies used by forex traders of all experience levels. The strategy is executed using the divergence indicators that most of the reputed forex trading platform contains to use on the chart. Well, the indicator works by indicating an uptrend when the price is breaking higher highs and lower lows.
One of these strategies can indeed be useful to you based on the ongoing trend of the chosen currency pair. Well, you need to first learn the fundamentals and gain knowledge about the forex market before using those strategies with higher volumes.