One of the most important thing that every trader need to prepare beforehand is choosing an effective strategy. Forex trading strategies for beginners is one of many strategies available. Choose the strategy that will help to increase their success in the market.
This is very important especially for beginner’s traders who are yet fully grasp the complexity of Forex trading world. Because Forex trading is a very volatile market.
There are many strategies to work with, and Forex trading strategies for beginners is a great place to start.
Type of Forex Trading Strategies for Beginners
There are several strategies that you can use in Forex trading. But you must be careful when choosing the strategy. Choose the strategy that suit with your trading behavior.
These are Forex trading strategies for beginners that you can choose:
► Carry Trade
Carry trade is one of Forex trading strategies for beginners that will take time to accumulate a profit. And this strategy works best in low volatile market.
The main idea of this strategy is where the traders must look for low volatile currency pairs. The pairs that have the biggest interest rate differential. Bigger differentials will make a much bigger swap or profit for the trader.
Next step is to trade in the direction of positive swap. Where they purchase the currency with high interest rate or sell the currency with low interest rate. By doing this in the long run, trader will be able to accumulate lots of profit.
► Currency Analysis
This is probably the basic
strategy of Forex trading strategies for beginners that every trader needs to know about.
The main idea of this strategy is to take an action based on currency analysis. To analyze currency, there are two methods that people can use technical analysis and fundamental analysis.
Technical analysis based the whole thing on the price movement and trends of the currency to predict where it goes. So people know when they can buy and when to sell.
Fundamental analysis sees the whole thing from the outside. It requires people to analyze outside factor. The outside factor such as government policy and political situation. Or even unemployment rate and its impact to the value of currency.
► Range Trading Strategy
This is a strategy of Forex trading strategies for beginners that easy to understand. And this strategy can be implemented by beginner’s trader.
Range trading or support and resistance level strategy is where trader learns to recognize the trend of the currency. Each currency has its own trend. It means that it has price fluctuations that go in the same direction for a prolonged time period.
Trader must be able to identify the trend, where they can spot the support and resistance price. And they will be able to take the right actions at the right time and reap the profit from it.
► Day Trading
Day trading strategy is one of Forex trading strategies for beginners where the trader does not hold up any position overnight.
Traders will close their trading within a day, no matter how many trades they make in a day. They will liquidate the whole currency before the market is closed down for the day.
The most important thing in this strategy is to studying currency fluctuation every day. So the trader will be able to recognize the best time to take the action.
The profit may seem small at first. But by doing several trades in a course of a day, the total amount will be pretty significant.
Beginner’s traders can start with one of those strategies and then move to other strategy. By keep practicing on it, they will learn more about Forex market. And increase their chance to be a successful forex trader in the future.