Three beginner Forex trading strategies
The first two strategies we will show you, are fairly similar because they attempt to follow trends. The third strategy attempts to profit from interest rate differentials, rather than market direction.
But first things first – what is a trend?
To put it simply, a trend is the tendency for a market to continue moving in a given overall direction. A trend-following system attempts to produce buy and sell signals, that align with the formation of new trends.
There are many methods designed to identify when a trend starts and ends. And many of the simple Forex trading strategies that work have similar methods.
If you’ve found yourself on this page – I am going to assume you’re very passionate about Forex trading and want to go far with it. The sad truth is that there are a lot of potato strategies getting cooked up in bedrooms, and passed around on forums like the holy grail.
Everyone’s time is precious! There is nothing worse than wasting a lot of your time on a trading system that leads you down the wrong rabbit hole.
Don’t get me wrong – there is some golden information out there, but you need to have a bit of experience behind you to spot what’s worth investing energy into or not.
Have you been unable to find any reliable trading strategies to get you going?
Or maybe you’re looking for some simple Forex trading strategies to supplement your current regime.
In this tutorial, I am going to share 3 strategies with you which are:
- Indicator free, only need clean price charts
- Require no ‘extra’ tools, just your charting software
- Have a simple & effective price action approach
- Reveal straight-froward, uncomplicated trade signals you can spot easily
When Forex strategies have these kinds of properties, they are easy to stick with for the long run (like a well designed diet).
Let’s put things into gear, and begin…
1. Currency Analysis
One of the easy Forex trading strategies for beginners is the use of currency analysis to predict market movements and currency fluctuations. There are two different methods used to analyze currency, and these are technical analysis and fundamental analysis. Technical analysis involves the price of the currency pairs and is used to help identify any trends and measure the price volatility of the currency to detect the trading signals. Fundamental analysis looks at outside and government factors that could impact the value of the currency, such as the unemployment rate and the stability of the current political situation of the country that offers the currency.
Either type of currency analysis strategy can be a good match for beginners, because the analysis is not overly complex and the trading signals are usually fairly clear and pronounced. Some beginners may do better analyzing the technical aspects of a currency while others prefer using fundamental analysis instead. Either way currency analysis Forex trading strategies are a good choice for many beginners in the Forex market, after the trader has successfully traded using a dummy account.
2. Day Trading Strategy
Day trading is one of the most common and most popular Forex trading strategies, and it can be ideal for many beginners to this market. With this strategy you will not hold any trading positions overnight. Instead traders will buy during the day and liquidate all of the positions held by the end of the same trading day. The longer you hold a position the higher your risk of losing on the trade. Day trading allows you to make many small trades during the day, without taking on higher risks with your positions. Currency prices are constantly fluctuating through the day, and taking advantage of these small price fluctuations can be easy to do and very profitable. This is true for beginners and experienced traders both. The price fluctuations are small, but over the course of many trades these smaller profits can add up to a much larger amount.
3. Support and Resistance Levels
Support and resistance levels are commonly used as Forex trading strategies, and this is an easy strategy for beginners to learn and follow. Each currency will have price fluctuations through the day and week, and these fluctuations will help identify any future price movements and trends for the currency. You can research and analyze the past price movements of a currency to identify the support and resistance levels of the specific currency. This method may also be called range trading, and to be successful you must identify the typical range of the currency trading activity. If a currency generally moves between $1.08 and $1.20 through the day then the $1.08 is the support price, and this is when the trader wants in. When the price gets close to $1.20, the resistance point for the currency, then the trader will usually get out of the position and cash in. This strategy involves identifying the support and resistance points but this is not usually difficult. Researching the currency fluctuations for the past week or two will help you set these points.