Internet trading in the foreign exchange market (Forex) is unlikely to be profitable without using trading strategies. Traders need to spend time and effort to create their own Forex trading strategy or adapt existing ones according to preference. It is important to choose the right strategy that will be easy to follow. The chosen system should be safely used based on the given deposit size.
This article lists down the top Forex trading strategies, as per Daily Forex.
Scalping Spot Forex Strategies
It is almost impossible to become a good Forex scalper right away, so one should study the basics. If you have just started scalping, you may know that this type of trading is one of the most difficult in the Forex market. It is difficult to scalp successfully for long, since this routine can be exhausted easily.
There are a lot of scalping methods. Each has its own indicator and oscillator, or vision of the market. However, the principle is the same among them: enter the market, take the profit, then leave. Scalpers must be able to make instant decisions and follow the trend.
Day Spot Trading
Day trading or intraday trading includes the opening and closing of positions during the same trading day. In day trading, traders mostly use short time frames, most likely 30 minutes or lower, because it is complicated to trade with H4 time frames or longer in the same day.
The most important advantage of day trading is that the position is always closed at the end of the day. These is no position left to control during the night.
There is nothing wrong with intraday trading if the trader does not bring a lot of risks, setting the proper stop loss orders and adequate position amount. Money management is a key aspect to all types of trading; day trading is not an exception. If you are not going to follow money management rules, it will not be possible to survive in a competitive Forex market.
Swing Spot Trading
Swing trading is often taken as a special type of trading based on fundamental analysis. The position in this trading method is held open for more than a day.
Fundamental news has an effect on the Forex market, so it is logical to think that institutional traders should practice swing trading. With this method, Forex traders use larger time frames: from four hours to a whole week, even to a month. Experienced traders prefer this type of trading, and the main reason is that they have most likely tried all methods and came to a conclusion that they are more comfortable with large time frames. Moreover, such trading plan provides them with more profit.
Usually, these traders have already learned to control their greed. Therefore, they do not seek to snatch all the market’s upward and downward movements. Small time frames can give more trading opportunities. However, more opportunities do not necessarily mean more profit. Sometimes, it only means that the losses may increase.