5 Proven Trading Strategies for Beginners
Forex market has become a quite competitive place these days and therefore to become successful there, you should be trading in winning trades mostly. And to do so, the most effective way is to make, use, and apply forex trading strategies properly. Following a single strategy or forex trading system can’t guide you to a successful trade.
You must have to know how to face and deal with different market conditions. Only then you will be able to do well in the forex market. Though changing strategies on the right time is not an easy task at all but the top and successful traders find their own ways to identify that. In-depth study of the markets, charts, price-action analysis, and proper understanding of all these can certainly help you in coming up with the right trading strategies.
Choosing the Right Trading Strategy
As we know forex is basically the combination of foreign currency and foreign exchange and trading with these are known as forex trading. But in order to becoming successful in forex trading, you need to get a clear and transparent idea about the forex trading system and forex trading strategies.
Only then you will be able to choose the right trading strategies for yourself whenever you are in need of one. Best forex strategy isn’t the one which you can use in every market situation and condition. Each situation deserves different and unique strategy and this is why you should choose your trading strategy according to the market condition. Only then you will get a fruitful result out of it and earn some real profits as well. Here we are providing some proven trading strategies which can be beneficial to understand the market movement as follows:
Technical Analysis Strategy
Technical analysis is the most popular and effective strategy of the forex world and almost all the top 10 forex brokers of the world use this strategy to help their traders to get winning trades from the market. This strategy is widely based on the study of the market action which is done by using the primary forex charts so that they can forecast future price of trends in recent days. It keeps them ahead of the market and help them buying the right and winning trades.
Using the right forex trading platform, they can certainly develop their forex trading strategies. Depending on the technical analysis tools, traders can develop their trading strategies as well. Technical analysis strategy includes different tools such as indicators, range, support and resistance levels, chart patterns, market trends, volume, etc. This type of forex trading strategies are an impeccable forex trading system which can certainly help you evaluating your assets.
To do so, you need put emphasis on the statistics and analysis of the market news, trends, past-action, price-action, and volume. Once you do your analysis based on these things, then you will surely find your way to the best forex broker in the world by choosing the right forex trading strategies.
Support and Resistance Trading Strategy
Before getting into understanding the full insight of the concept of support and resistance trading strategy, we have to understand about horizontal level first. Horizontal level is an integral part of support and resistance forex trading strategies.
A price level which indicates either a support level or a resistance level in the forex market, is known as the horizontal level. In technical terms they are known as low prices and high prices respectively. Now let’s learn and understand what the term support indicates to us. In forex charts, an area which is points the buying interests quite strongly and exceeds all the selling pressure from the traders is known as support level.
Whereas the resistance level indicates that specific area of the forex chart where buying pressure is overpowered by the selling interest and it is mainly pointed by the previous peaks of the forex charts. Therefore, if any trader wants to develop support and resistance level forex trading system, then he must be well-aware of the identification process of the trends through several horizontal levels. And this is why learning about horizontal levels are important on the first place.
Range Trading Strategy
Range trading strategy is also known as channel strategy in some of the countries with forex market. Range trading strategy is the best forex strategy in many forex market conditions. It is quite old strategy and for this reason a proven one as well.
You can count on range trading strategy when the scenario or condition fits its feature. This forex trading system is mainly used when there is no available market direction or a limited market direction. It associates with the direction when the trend is absent and push the market direction into your favor.
Range trading strategy is quite effective one because it identifies the movements between currency pair prices in different channels so that you can easily find the range and use it for your own benefit. Carrying out this process requires some skills and knowledge as well. Because you must need to connect the series of highs and lows by using the horizontal trend lines. Once you connected them precisely, you will be able to use the strategy and carry it out properly in your forex trading.
Volume Trading Strategy
Volume trading strategy is one of the most recognized and renowned trading strategies among the traders. Volume will show you all the available number of securities which can be traded over a specified time whenever they want. The formula of finding higher volume is equal to higher degree of pressure or intensity of the forex market. So to determine both the upward and downward movement of the volume, traders need to look at the bars of trading volume which you will find at the bottom of the chart.
Any type of price movement will be consider as significant once it is accompanied by both the high volume and a weak volume (relatively). People throughout the world are using this strategy to set their trading right and make more money from the forex market. But without following the direction mentioned above, things can get real tough and difficult for you in case of having a proven strategy in trading to survive in the forex market.
Always remember one key note about this forex trading system, all volume type may not influence your trade to the right direction so that you can win them. But if you can trade using the volume of large capitals, funds, or amounts of money within the very day, then it can certainly affect the market and influence your trade as well.
Timeframe Analysis Strategy
Timeframe analysis or multiple time frame analysis is one of the best trading strategies for both the beginner and veteran traders of the forex market. This particular strategy recommends the traders to follow a specific security price over several timeframes.
This strategy is quite useful and beneficial for the traders in order to analyzing different timeframes while determining the circle of trading of the forex security at the same time. By using MTFA (Multiple Time Frame Analysis) traders get the power to regulate both bigger and smaller scale trends and recognize them throughout the market in a short span of time. It can also help them to get familiar with the market trends also.
This complete concepts of processing MTFA starts by identifying the market direction on three different higher time frames: long, intermediary, and short. After that, we need to analyze it through all the lower timeframes and you have to start analyzing from the 5-minute forex chart. Forex traders have the power to conduct an MTFA (Multiple Time Frame Analysis) by using different timeframe charts which will be available on the websites of the forex brokers.
When you are doing forex trading in the market, you will surely expect a great amount of profits as well. Your end-of-the-day profit will hugely rely on the strategy you are applying while trading. So, it is basically a must need to get success in forex trading.
Therefore, coming up with the straightforward and tailored forex trading strategies according to your trading style and market condition can help you make some serious money and profits from the forex market. Technical analysis whether it is your chosen strategy or not will play the most vital and effective role in your trading. Never follow the same strategy again and again in order to get success. Try to learn to cope with different scenarios with different forex trading strategies. Only then you can become of the finest in the trading business.