Most people find Forex trading quite overwhelming in the beginning because it can feel a bit much when you’re starting out and all you see is advance analysis and jargon that has you rushing to Google to get to get to the meaning of every sentence.
If you find yourself stuck in this situation as well, this blog might prove to be useful. Listed below are three incredibly helpful strategies that are not only very useful but are beginner friendly as well. Take a look.
- Trend Trading
Trend trading is one of the most popular and well-acclaimed strategy in which traders keep an eye out for clear upward or downward trends.
These trends are identified using tools such as moving averages, volume, momentum, and RSI. These are all incredibly useful market indicators and tools that will help you tremendously if you can get the hang of them.
In trend trading ideally you should get in on a trade when the trend is beginning to form and ride the wave, but that is not always possible. Even if you cannot get that maximum potential profit out of it, you can still have a successful trade.
Just know that trends don’t go on forever, so if the charts are showing that a reversal is imminent, get out while you are still profitable. Some noise is inevitable so in the beginning there will be times when anxiety about your trade might make you leave it prematurely but I still say better safe than sorry. With time, you will be able to distinguish noise from reversals more clearly.
- Range Trading
Range trading relies on trading pairs and commodities that are stable and which move between established support and resistance levels. It is another very popular trading strategy.
There are definitely times when a currency will not abide to a range but usually if it has hit a support and resistance level at least two to three times, the range is considered to be set and the levels well-established.
This is a safe way to catch a few pips from securities that don’t fluctuate too much and show too much volatility.
- Breakout Trading
Breakout trading is the opposite of range trading in the sense that here you are relying on a security breaking out of the range or the established support and resistance levels to enter a trade.
When price breaks through an established resistance level, it indicates a bullish trend, and when it breaks through an established support level, it indicates a bearish trend. These breakouts indicate volatility.
Not every breakout means a trend is about to form, but it means that either a new level is being tested or there is going to be a lot of momentum in that direction so some traders advise getting in on the trade as soon as there is a breakout. Others suggest that you wait and see where the market is headed before risking any amount for that trade.
Before you try out any of these strategies, make sure that you have done some more research and study into these and know what you are doing. You can test them out with a demo account first to get a sense of what they can offer.
