Top 8 forex trading strategies, and their pros and cons

Top 8 forex trading strategies, and their pros and cons

The complexity and complication in the forex market have given it a different edge in the market. The outcome of the trade depends on a lot of factors such as political tensions, turmoil’s, policies of the banks, and the business – import and export. In addition to that, there are personal preferences, knowledge, research, and experience that you have to keep in mind. Compared to the stock market, Forex is high-risk, low-investment, and stays open 24/7.

PRICE ACTION TRADING:

This sort of trading is much beneficial to forming plans for the future in the market. Action Trading is the process where you study the patterns and prices of the past to make a plan. The MO is to wait for the price to appear and then apply the study.

RANGE TRADING STRATEGY:

This strategy has been categorized as one of the time-consuming, however, in the long-run the strategy plays its part. There are trading options to consider after you identify the support and resistance points. It’s to mention that everything in the market matters and a single glitch can prove to be disastrous.

TREND TRADING STRATEGY:

This strategy allows the trader to form a long-term or a short-term. This is applicable in a lot of situations, irrespective of the experience that one has, the strategy has been a preferable one by many of the traders. This can be a lengthy process in case of the outcome.

POSITION TRADING:

Compared to day trading, this strategy concentrates on the long-run. The primary focus is on the long-term effects where the day to day complications aren’t taken into consideration. Whatever happens daily doesn’t affect the outcome of the trade in the long-run.

DAY TRADING STRATEGY:

This is the most popular strategy in forex. The concentration is on the day and what happens in the market is taken into consideration. The idea is to trade the currency and close before the day ends. Even though the ratio is mild, there are decent opportunities to make a profit.

FOREX SCALPING STRATEGY:

There are a lot of trading opportunities in a day, you close and open multiple ways. Besides that, you make small profits more often. Even though the strategy is hectic, there is a chance to make profits and a decent window to do it.

SWING TRADING:

This strategy has been lagging in a lot of things especially among the traders however, the application can be beneficial in certain situations. The risk-profit is medium with trading opportunities whereas you take the advantage of range-bound and trending markets.

CARRY TRADE STRATEGY:

Even though the investment is limited and restricted, there are chances of making a profit. You buy the currency at a lower rate and then follow it by buying the currency at a higher rate.

Conclusion:

The application of any strategy in the trade depends on a lot of factors. The addition of the knowledge, experience, and determination of the trader will surely change the course of the trade. However, there is always the uncertainty of the trade to take the front seat.

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