Forex trading strategies

One way to help you maintain discipline in Forex is to have a clear strategy that you must pursue.

If this trading strategy has worked well, you will have a much higher chance of winning when using it.

When people speak about trading strategies, they mean specific forex trading methods which are usually only part of a trading plan. Harmonized successful forex trading strategies provide right entry signals, but it is also important to consider:

  • Main trend direction

  • Risk management

  • Deal exit points

  • Free Forex Demo Account


Forex trading strategies1


How to choose the best Forex strategies

What is the best strategy on Forex - there is no unambiguous answer.

Every trader chooses a strategy himself, based on his free time and appetite for risk. It means that you need to consider your individuality and develop a plan that matches you.

Conversely, a trading strategy, which was underestimated by others, may be suitable for you.

Therefore, only in the course of testing different strategies and approaches, you will be able to find the one that suits you and remove those that do not suit you.

One of the critical aspects that you should consider is how much time you can devote to trading.

Below is a description of different trading styles in the Forex market in 2020.

1. Scalping is a short term trade that opens for a few minutes. Scalper tends to make quick profits in a few points. Tick charts are usually used, such as those found in MetaTrader 4 Supreme Edition.

2. Intraday trading is trading that remains open during the day, as the name implies. It eliminates the possibility of adverse effects of significant impulses. Forex day strategies (or intraday strategies) suggest that trading can take only a few hours, and the timeframe can be set to one or two minutes.

3. Swing trading is a position held for several days to profit from short-term price formations.

4. Position trading is when a long-term trader usually views the charts at the end of the day.

Swing trading strategy

Swing trading is a unique method of trading using rollback points (corrections), which appear during the trend formation. This strategy uses daily or weekly timeframes and risk management principles.

Swing strategy is a method that aims to enter a trend at the time of reversal and make a profit with the lowest risk. The word swing in English means "swing back and forth" or "move wide", i.e. basically trading a swing is wriggling after the trend.


Forex trading strategies2


Hedging strategy

Forex hedging is a method to compensate for the risk of future price fluctuations.

It is a prevalent type of financial transactions that companies regularly conduct as part of their business.

Companies often have an undesirable impact on the value of foreign currencies and commodity prices.

As a result, they seek to reduce the risks associated with financial transactions.

Financial markets were mainly created for such transactions only - when one party reduces the risk of the other.