Articles

Best Forex Trading Strategies for Beginners in 2021

by Kazi Tanzib Forex Trading Analyst
How many hours do you spend on forex trading a day?

Experts are pointing out 10 to 12 hours a day. But as a novice trader, what will be the best time to trade and how many hours do you think to spend in forex trading?

Maybe many of you thinking about it right now. And if I added which forex trading strategy do you need to follow? I think the answer will be shrunk. However, this article will cover the best forex trading strategies for beginners nowadays. So, hold tight...

Scalping

Forex scalping is a popular trading strategy that is focused on smaller market movements. This strategy involves opening a large number of trades in a bid to bring small profits per each. 
 
As a result, scalpers work to generate larger profits by generating a large number of smaller gains. This approach is completely the opposite of holding a position for hours, days, or even weeks. 
 
Scalping is very popular in Forex due to its liquidity and volatility. Investors are looking for markets where the price action is moving constantly to capitalize on fluctuations in small increments.
 
This type of trader tends to focus on profits that are around 5 pips per trade. However, they are hoping that a large number of trades is successful as profits are constant, stable, and easy to achieve. 
 
A clear downside to scalping is that you cannot afford to stay in the trade too long. Additionally, scalping requires a lot of time and attention, as you have to constantly analyze charts to find new trading opportunities. 

Day Trading

Day trading refers to the process of trading currencies in one trading day. Although applicable in all markets, the day trading strategy is mostly used in Forex. This trading approach advises you to open and close all trades within a single day. 
 
No position should stay open overnight to minimize the risk. Unlike scalpers, who are looking to stay in markets for a few minutes, day traders usually stay active over the day monitoring and managing opened trades. Day traders are mostly using 30-min and 1-hour time frames to generate trading ideas. 
 
Many day traders tend to base their trading strategies on news. Scheduled events e.g. economic statistics, interest rates, GDPs, elections, etc., tend to have a strong impact on the market.

Position Trading

Position trading is a long-term strategy. Unlike scalping and day trading, this trading strategy is primarily focused on fundamental factors. 
 
Minor market fluctuations are not considered in this strategy as they don’t affect the broader market picture.
 
Position traders are likely to monitor central bank monetary policies, political developments, and other fundamental factors to identify cyclical trends. Successful position traders may open just a few trades over the entire year. However, profit targets in these trades are likely to be at least a couple of hundreds of pips per trade.

I hope, this entire article helps you a lot about how to use a proper forex trading strategy. If you get this right and make this really happen, you can make a good figure for your strategy. Also, if you really working hard on strategies, read price action vs trading indicators.

Till then, Take care!

Sponsor Ads


About Kazi Tanzib Advanced     Forex Trading Analyst

78 connections, 5 recommendations, 316 honor points.
Joined APSense since, January 18th, 2021, From khulna, Bangladesh.

Created on Nov 8th 2021 01:46. Viewed 142 times.

Comments

No comment, be the first to comment.
Please sign in before you comment.