What are the best forex trading strategies?
Basically, forex trading involves currency trading. Forex market is highly volatile, the values of the currencies can rise or fall within a short period of times, based on different factors. The main factor is the economic condition of the country; it has a greater impact on the forex market. The volatility of currency values gives the profits to forex traders and this is the key objective of getting into the trades. Best forex trading strategies are the sets of analysis used to find the perfect time to sell or buy the currency pairs at a specific time period.
Best forex trading strategies are based on technical analysis of the forex charts and the economic news. These strategies are developed by forex traders or a third party offering paid technical analysis and tools to traders. Nowadays different companies provide automated systems for trade to reduce the burden of traders; they can customize automated software according to their trading strategies.
Types of best forex trading strategies:
There are many Best Forex Trading Strategies used by the forex traders to decide which one is suitable for their desired trading style.
- Forex volatility:
Forex market is a highly volatile market, prices can increases and decreases in a very little time period. For short term and quick trades, volatility systems are created to fulfill the requirements of traders to take more benefits from price actions. This trading strategy is suitable for traders who understand the volatility observation.
- Follow the market trend:
Long term traders follow the market trends to decide the direction, which can be beneficial in some future dates. Instead of the prediction or forecasting the prices, use these trading strategies to follow the trends of the forex market.
Scalping strategy is used to make multiple trades and get small profits for each. Constant market analysis and the multiple trades at once are necessary to take advantages of scalping. Traders are relatively fast in predicting the market conditions to open or close a trade in a short period of time.
- Fibonacci Pivot:
In this trading strategy, the combination of the pivot point and the Fibonacci sequence is used to trade forex. Those traders, who understand the calculations for the pivot, will find this strategy very helpful while they trade in currencies. This calculation needs to be accurate because it makes the market backbone.
- Chart patterns:
Forex charts play a vital role in forex trading. There are three most common chart patterns used in forex trading, the triangle, head, and shoulder. Triangle pattern is mostly occurred in the short time frames and can be symmetrical, ascend or descend. Low and high prices create a triangle in the close-fitting price area. The head pattern shows the topping information when uptrend occurs.
When an uptrend occurs the head pattern shows the topping information, in case of downtrend the bottoming information shows by the shoulder pattern.