If you’re just beginning Forex trading, you need to be aware of what you need to do to make a profit. According to statistics, 70% of the traders end up in deficit and the most common mistakes they make are irrational trading strategies.
As a new Forex trader, you can turn this into your benefit and only opt for the strategies that will make a profit. In this article, we will explain what Forex trading strategies you should use to make most of the chances you have.
FOREX TRADING STRATEGIES FOR BEGINNERS:
As a beginner, you probably require a trading strategy that is simple but operative. Therefore, we have mentioned some of the simplest but reliable Forex trading strategies below that you can choose from on your venture to become a prosperous Forex trader.
1. The 50-Day Breakout Forex Trading Strategy:
It has been understood by research that the price movement of liquid financial instruments shows a momentum effect. What this means is that when prices are surging into one direction, it is more probable that the prices will persist in that direction over a short duration. And, it is probable that a further surge in that direction will be better than anything against it.
You can use these inclinations to determine when prices will break into new long-term highs and lows. As such, you can use this to your advantage and make a profit out of it. You should also use this strategy only on liquid Forex currency pairs.
Over the past two decades or so, we’ve observed that the most profitable currency pairs have been EUR/USD and USD/JPY. Hence, only these two currency pairs should be traded with this strategy.
2. The Breakout-Pullback Forex Trading Strategy:
After you receive the 50-day highs or lows, you have to wait one more day. If the second day ends with a contrary direction to the breakout, you make a trade. What is more problematic here is the entry, as the price might still be pulling back opposite to the inclination.
Therefore, it is better to drill down to the four-hour or hourly duration and only enter when you have a candlestick adjacent above the previous two candlesticks’ particular concluding prices if you want a decent trade, or below them if you have a minor trade.
3. The “Buy the Dips” Trading Strategy:
The “buy the dips” trading strategy is one of the most appropriate strategies for beginning Forex traders to make a profit. It revolves around determining trade prospects on the weekly duration and using the 4-hour or hourly chart to recognize an indication to enter.
4. The Simple Range-Trading Strategy:
Often than not, markets don’t have inclinations and most of the strategies are suited only for dynamic inclinations in the markets. It is always better to have another method for the times when there are no inclinations in the significant Forex currency pairs.
For this strategy to work, the first thing you have to do is to recognize when conditions are fluctuating, which can be performed by observing that neither the EUR/USD nor the USD/JPY currency pairs are creating new 50-day highs and lows.
Next, you have to find an unstable currency pair that has been fluctuating for the past 50 days. Once you do that, you’ll be prepared to wait for the indication to enter the trade. You will receive this indication when the wick of a routine candlestick moves beyond the 50-day high or low. However, the candlestick closes the reverse direction.
Conclusion:
If you’re a beginner in Forex trading, you can profit from these simple strategies. All of these strategies have a record of turning a profit over the long-term. Whether you’re beginning Forex trading or becoming better at it, these strategies can aid you in your venture.
For more strategies and comprehensive articles to aid you on your way to Forex trading, you can visit DailyForex. With hundreds of articles written by experts, you can be assured of only the top-notch strategies to begin and expand in Forex trading.
Also Read- Dealing with the Dynamic Opportunity in the Forex market