The Most Effective Forex Trading Strategy


There are lots of forex trading strategies that can be learned. Some trading strategies that are often used are usually based on fundamental analysis and technical analysis. And then they apply their trading strategies by making long-term transactions (long term trading) or short-term transactions (short term trading).

A trading strategy is designed with the aim to beat the market and generate profits. Also read about the relationship between Forex indicators and Forex market drivers Based on ideas, observations of behavior and history that occurred in the market before, a trader is required to be able to build a mature trading strategy with a variety of techniques which of course will produce profits consistently.


1. Swing Trading

Swing trading is a strategy that utilizes the end of a price trend. When a trend ends, a new trend usually waits to appear and this is the entry point for the swing trader. For this reason, traders must set rules (algorithms) for taking positions using technical and fundamental analysis in order to identify the time to buy or sell an instrument. This trading strategy is not suitable for use in market conditions ranging or sideways, given the tendency of this strategy to hold positions for more than 24 hours.


2. Range Trading

This strategy is one of the simplest strategies, with expectations that prices will tend to always return to near the long-term average. The key to this strategy is to determine the turning point as an entry point, and for that we can use technical support and resistance analysis, or with indicators and oscillators.


3. News Trading

More and more in demand, this trading strategy focuses on the actual news and economic development and moves the market released every day. Opportunities for each important data release, but this approach is sometimes quite volatile given short-term movements. Traders must master the time and impact of the data release, so that they can navigate volatility and reap profits from price movements.


4. Scalping

Having a negative connotation, trading in the world of forex is one of the fastest strategies. Scalping strategies utilize price gaps arising from the order and spread bid / ask flows so that they require speed. Scalpers only hold positions in short time with low volume and avoid large movements, so that risks can be minimized. With high trading frequencies, scalpers will prefer calm and sideways market conditions, avoiding sharp and sudden price movements.


5. Position Trading

This trading strategy is a passive trading strategy, using long-term charts to read the direction of market trends, with periods ranging from daily to monthly. Given the long-term strategic approach, the position can be staged for several days to weekly or even monthly, depending on the current trend. The importance of entry and exit points in this strategy raises difficulties in taking positions in market conditions with high volatility.


6. Day Trading

Day trading is the most active trading strategy, which means the position opened on that day must be liquidated that day. Regarded as a complicated strategy, Day Trading is often used by professional traders, market makers and investment experts, so that beginning traders need education first.


Finally all returns to yourself to choose what forex trading strategies will be used. Because the trading strategy used by other people is not necessarily in accordance with the trading style you have.