Forex Trading Basic

Easy and Effective Forex Trading Strategies

Forex Trading Hedging Strategy

Let us learn some profitable Forex trading strategies provide that we have a good understanding of Forex trading Technical Analysis and Forex Trading Fundamental Analysis. Forex trading can be as frustrating as it can be rewarding! And Forex (Foreign Exchange) is no exception — often described as risky, profitable and complicated. So, you must have some profitable forex trading strategies in place to join the party of winners and not getting involved with the losers.

Basis of Profitable Forex Trading Strategies

Profitable Forex Trading Strategies can be formed based on three aspects:

  • Strategies Based on Technical Analysis
  • Strategies Based on Fundamental Analysis
  • Strategies Based on Market Sentiment Analysis

Technical Analysis based Strategies

Mostly small and medium size investors prepare strategies based on technical Analysis. Strategies based on technical analysis consider factors that are actually affecting the market rather than factors that can affect it. Thus, the price which is quoted reflects all the factors that have influenced it. Only market generated facts and figures are taken into account and factors like fear, hope, expectations or other changes are not considered. Thus the analysis is generally based on these suppositions:

  • Price reflects all actual market movements. That means price includes everything known to the market like supply and demand of foreign exchange, political factors, trade agreements etc. It is not concerned with what resulted in change rather deals with actual changes. It works on the assumption that price can take only one of the three directions: upward, downward and sideways.
  • It rest on those market patterns that have been identified as significant. That means those factors which are repetitive in nature or will produce desired results.
  • History always repeats itself as human psychology changes very slowly with time. That is market movements are predictable.

Fundamental Analysis based Strategies

Fundamental traders prefer to trade based fundamental analysis and strategies prepared from this. Fundamental analysis involves strategies where current economic, political, financial situation of the country of currency is studied. A country’s economic and political condition merely depends on many fundamental factors like the interest rate, unemployment level, exports and imports, per capita income, percentage of population living above and below the poverty line, inflation, trade relations with other countries, tax policies etc.

A fundamental analyst studies and evaluates all the fundamental factors before coming to any decision. Thus it helps in long term decision making and making profits in short term by extra ordinary developments.

Choosing your own Profitable Forex Trading Strategies

The Forex market is the largest financial market in the world, and every day people are becoming increasingly interested and getting involved here. But before you begin trading, make sure your broker meets certain criteria, and take the time to find a trading strategy that will work fine for you.

Profitable Forex Trading Strategies are basically prepared by successgul traders. Most of successful traders will develop a Profitable Forex Trading Strategies of his own and try to make it perfect over a specific period of time. Some people will focus on one particular study or calculation, while still some others use broad spectrum analysis as a means of determining their trades. Most experts would likely suggest that you try using a combination of both fundamental and technical analysis, with which you can make long-term projections and also determine entry and exit points. Of course, in the end, it is the individual trader who has to decide what works best for him.

You must be able to trade without emotion. You can’t keep track of all stop-loss points if you don’t have the ability to execute them on time. You must always set your stop-loss and take-profit points to execute automatically, and don’t change them unless you absolutely have to. Make your decisions and stick to them. Otherwise you will drive yourself and your brokers crazy.

The Bottom Line: Profitable Forex Trading Strategies

Trading successfully needs knowledge, time and understanding of a market and above all- having some Profitable Forex Trading Strategies. You will not be able to earn continuously in a Forex market due to its volatile nature. Thus, as a forex trader you should try to consider both technical and fundamental Profitable Forex Trading Strategies and make decision based on market expectations and trends. Try trading with money that you can afford to lose without any regrets. Trade with logic and if you are not sure quit and take rest for some time.

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Please note that: because of the differences in trading conditions, all the forex strategies can not be applied to all broker platforms. So, Choosing Forex broker is a vital task. We would like to recommend you HYCM Broker. This broker has all the positive trading conditions necessary for any forex strategy to work. Read HYCM Broker Review to learn more.

READ MORE

Chapter 7

Forex Trading Strategies

Lesson 1Profitable Forex trading strategies
Lesson 2Most popular trading strategies
Lesson 3Forex Scalping Strategy
Lesson 4Forex Trading Hedging Strategy
Lesson 5Forex Trading Trendline Analysis
Lesson 6Forex Trading Breakout Strategy
Lesson 7Pivot Point Reversal Strategy
Lesson 8Pivot Point Break Out Strategy
Lesson 9News Trading Strategies
Lesson 10Marker Sentiment Analysis
Lesson 11Pivot Points Trading Strategy

Go back to Main Page: Forex Trading For Beginners

About the author

Syed Nazim

Syed Nazim is the Marketing Manager of RedMaroon, a Digital Marketing Agency for Financial Institutions. He is also involved with Forexing24.com as a writer and financial Analyst. He is a brilliant marketing geek with vast experience in every sector of Digital Marketing. He likes sharing strategies, tactics and proven methods to help you build a business and live the life of your dreams.

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