Profitable Forex Strategies

Posted by Kavish on April 12th, 2021

Introduction 

The forex trading strategy helps investors to make profits in the forex market. The forex trading strategy plays a vital role between the traders and the forex market; it helps trade. The forex trading strategy is based on technical analysis and fundamental analysis; with the help of these two analysis, the opportunity will be made for the traders. 

What is forex trading?

In simple words, the exchange of one currency against the other currency. Forex trading is just like stock trading the significant difference between both is in stocks exchange, in which trade in stocks where the forex market trade in currency. Forex trading is regulated by the United States, the commodities future trading commission (CFTS) and the Financial conduct authority (FCA). The forex market is the largest and deepest market all over the world. The forex market is essential for commerce, trading and tourism. Everyday transactions of forex are around trillion in which the (individual, companies and banks are included), which means the forex market is not a scam. 

What is a currency pair?

Forex is always traded in pairs, and the forex trader is buying one currency and selling the other. Forex pairs are a combination of two different currencies. A majority of forex pairs are quoted to the fourth decimal place. For Example, the base currency is the one traders think it will go up, and the quote currency or counters currency may go down; the currency value is important for trading. The GBP/USD currency pairs' current market price shows like these hundreds of currency pairs in forex trading. Each currency pair has a different market price to exchange the currency.

Best world currency is:

• US dollar (USD)

• Euro (EUR)

• Japanese yen (JPY)

• Pound sterling (GBP)

• Swiss Franc (CHF)

• Australian dollar (AUD)

What is a forex trading strategy?

A forex trading strategy is a technique that the trader uses to trade in forex. It helps traders to decide whether to buy and sell the currency pair at a given time. A forex trading strategy allows traders to analyze the opportunity and risk of the market. The forex traders easily take the decision and trade accordingly. 

These are the Profitable forex strategies.

• Price auction strategy - The price action trading strategy requires studying historical price movements to develop a trading strategy. Price action is a strategy that can indicate prices with better indicators. In price action trading, there is no duration or length of trade. It can vary from short to long based on the analyses. Traders need to determine the entry and exit points that can be most profitable. You need to analyze multiple possibilities using the price action trading strategy because you cannot rely on a single possibility.

• Day trading strategy - The day trading strategy means buying and selling the currency within the same day of trading. Before closing the market, you have to sell your holding in the market. 

• Swing trading - Swing trading does not require any technical or fundamental analysis because it is based on speculation. Swing traders take advantage of the price movements that are going on in the market. If you are also a swing trader, you should not hold your positions for the long term because this trading strategy is generally traded for fewer days. The swing trading strategy depends on your trading style because it does not have any set of knowledge and requires analysis of support and resistance levels. Therefore, after analyzing the moving average, you can predict when to buy and sell your holdings. This is a forex strategy that many traders practise for profit-making.

• Position trading - Position trading is based on fundamental and technical analysis and generally focused on long-term trading. Minor changes in the exchange prices are not considered in position trading. This strategy can be used for trading in other financial markets also along with forex trading. Position traders generally focus on longer terms such as weeks, months, or years. It requires studying every factor that can affect market conditions such as political, economic, international trade, etc. The trading opportunities are lower with this trading but require a very low investment of time and studying support and resistance level.

• Carry trade strategy - Carry trade strategy refers to borrowing one currency at a lower interest rate and investing other currency at a higher investment rate. The profit arises from the difference between the borrowing rate and the investing rate. Several traders use this trading strategy as it has a low risk of investment. The duration of investing and borrowing money is similar and generally higher, like weeks, months, and years.

Best broker for trade in forex 

TradeATF is the best broker in the forex market. It is authorized and regulated by the International Financial Services Commission (IFSC) of Belize. TradeATF offers the best features and services to traders. TradeATF gives educational resources to the traders that help to trade. TradeATF offers the 350+ instruments such as commodities, forex, stocks, indices and cryptocurrency. 

Is it worth becoming a forex trader?

It is a good opportunity for the investor, but it is not a full-time job. Before the forex trading investor, you have to gain knowledge about the market than practice on a demo account then invest the actual money in the market. 

The Bottom Line

The forex trading strategies are essential for the traders to trade. All the forex trading strategy is suited to different situations in forex trading. There is a wide strategy in the market in forex trading because the forex market is the largest market in the world.