Forex trading leverages the fluctuation in currency values for creating money making opportunities for the investors. Like in every trading avenue, forex trading also requires a little bit of strategizing and lots of luck. If you think you have got your mind in speculating to close to 100% correctness, you must try this avenue to keep your cash register ringing. To help you make a good start, we bring you top strategies that are available for investor who differ in their risk appetite. These most common strategies are:
- Swing strategies
When you eye at a particular moment in forex price trend to place your bet, it is called swing strategy. The swing is actually a moment where support or resistance condition is quite prominent. This strategy requires you to be a close observer of the forex price trend and also a thorough with the trading fundamentals. The trade is held for a bit longer time than an intraday and may last for weeks. A swing strategist need not forego his current occupation to be this kind of trader. Involving in swing strategy is quite similar to making a small term deposit but certainly with greater risks and greater returns.
- Day trading
Now, this is what a hardcore forex trader does. The investor of this kind has taken trading as main occupation and is actively involved in keeping tab on every moment’s activity at forex. The trades can be quick, kept for as short as a period of a few minutes, or the trade can last till end of the day too. Thus, risks are definitely higher, and one can make or break millions in a day. The biggest advantage is that you get to close the trade the same day, thus, you can plan for the next day better. The biggest disadvantage is that you are totally engrossed in keeping an eye on the market movement and that you cannot escape stress trading this way.
This is the riskiest way of trading in forex. The trade is very very short-lived; say lasts only for a few seconds to a few minutes. Thus, you have to have an added bonus of extreme luck on your side to be a winner in this kind of strategy. It certainly is not a profit-making proposition in many cases as our mind may not work as faster than the machine and can leave us in lurch when the decision is to be made in a split of a second. However, this type of trading strategy offers you enormous opportunities to trade throughout the day. Thus, take chances, but try not to go overboard with the amount you pitch in.
Apart from these three main trading strategies, one can go for transition trading and position trading too. Which one of these suits you depends upon how aggressive you are into trading and how well you know the forex market. Learn all about relevant terms, if you are a beginner, from the best MT4 brokers and know the game real well.