Forex trading strategy is an undeniable thing in the forex world. Because, without a standard strategy, trading will be impossible. That’s why here are 2 best forex trading strategies that I truly believe–
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- Scalping
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Forex scalping is a popular trading strategy that is focused on smaller market movements. This strategy involves opening a large number of trades in a bid to bring small profits per each. As a result, scalpers work to generate larger profits by generating a large number of smaller gains. This approach is completely the opposite of holding a position for hours, days, or even weeks.
Scalping is very popular in Forex due to its liquidity and volatility. Investors are looking for markets where the price action is moving constantly to capitalize on fluctuations in small increments.
This type of trader tends to focus on profits that are around 5 pips per trade. However, they are hoping that a large number of trades is successful as profits are constant, stable, and easy to achieve. A clear downside to scalping is that you cannot afford to stay in the trade too long. Additionally, scalping requires a lot of time and attention, as you have to constantly analyze charts to find new trading opportunities.
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- Day Trading
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Day trading refers to the process of trading currencies in one trading day. Although applicable in all markets, the day trading strategy is mostly used in Forex. This trading approach advises you to open and close all trades within a single day.
No position should stay open overnight to minimize the risk. Unlike scalpers, who are looking to stay in markets for a few minutes, day traders usually stay active over the day monitoring and managing opened trades. Day traders are mostly using 30-min and 1-hour time frames to generate trading ideas.
Many day traders tend to base their trading strategies on news. Scheduled events e.g. economic statistics, interest rates, GDPs, elections, etc., tend to have a strong impact on the market. In addition to the limit set on each position, day traders tend to set a daily risk limit. A common decision among traders is setting a 3% daily risk limit. This will protect your account and capital.
But with these 2 strategies, I was still unfinished. I want to mention Pipswin, that it really supports me in good and bad times by providing me the right direction.
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Source: 3 Successful Forex Trading Strategies | ThinkMarkets