Common Active Trading Strategies

This article is all about the forex strategies important for the trader to make a good profit in forex trading. And also, select the best broker for trading with unique features and services before trying strategy with the actual investment. The trader has to try the strategy on the demo account and choose the best one for trading.

What is forex trading?

Forex trading is exchanging one currency into another currency. Forex trading is just like stock trading. The main difference is that the forex market is traded on the currency. The forex is the largest market globally, where the per day transactions are around $6.6 trillion. 

What is a forex trading strategy?

A forex trading strategy is a technique that the investor uses to make a higher profit in trading. The strategy helps traders decide whether to buy and sell the currency in the market. The forex traders easily take the decision and trade accordingly—forex trading strategy based on technical analysis and fundamental analysis. The traders take the help of these strategies and make an opportunity for a profit. 

What are the common active trading strategies?

• Day trading 

Day trading is the strategy that the trader uses to buy and sell securities within the same day. In simple words, before closing the market, you have to sell your holdings in the market.

• Swing trading 

Swing trading is based on speculations, and it doesn't require technical and fundamental analysis. Swing traders hold their position for a few days and over a short period. Swing trading has no set of knowledge or required skills, and it entirely depends on the trader's trading style. After calculating the moving average, the trader can predict whether to buy and sell the holdings in the market. 

• Carry trade strategy: Carry trade strategy refers to borrowing one currency at a lower interest rate and investing in other currency at a higher investment rate. The profit arises from the difference between the borrowing rate and the investing rate. Several traders use this trading strategy as it has a low risk of investment.

• Scalping 

Scalping trading focuses on the small price changes in the market to gain profit. The scalping trader buys and sells the securities for a second and for a minute. It is the only strategy in which the risk of losing money is at a higher rate because the forex market is volatile. In scalping, the smaller moves of the price are more constant as compared to the higher moves in price. 

• Position trading 

It is the strategy that is based on the technical and fundamental analysis of the market price. It is basically for long term trading, and the position traders generally invest their money for a week, month and year. It requires the study of the market, including political, economic, international trade, etc. The trading opportunity in the position trading is relatively low compared to the other strategy in the market. 

What are the advantages of the strategy?

• Use the technical indicators: With the help of the technical indicators, the trader can easily use their strategy for trading and make a high profit against it. 

• Easy to predict market price: Forex trading strategy is helpful to predict the market price of the assets. 

• Easy to handle: As you select the trading strategy, the system automatically works for that strategy itself. 

What are the disadvantages of the strategy?

• Market reversal: If the trader invests their money at a lower price, then suddenly, the price of the assets goes down.  

• Leverage: If the trader invests large amounts of money in trading with the help of leverage, then if any things happen in the market and face financial loss. Then, the trader has to pay the leverage money to the broker.

What is the best forex trading strategy for beginners?

Breakout trading is the best strategy for forex trading in which the investor has to take the position after seeing the trending prices and moves. In simple words, the first step is to identify the current price trends in the market and plan when to enter and exit the market according to the market situation. 

How long does it take to master forex?

If you are willing to learn forex trading, you have to open a demo account under the TradeATF and learn the trading better. The brokerage company offers various types of tools and indicators for the learning perspective. Use all the types of forex trading strategies and select the best one and use it in actual trading to make a higher profit. 

What are the best brokers for forex trading?

• TradeATF

It is the representative name of Bayline Trading Limited, and it is sanctioned and authorised by the International Financial Services Commission (IFSC) of Belize. TradeATF is the digital sponsor of the Argentina Football Team. The brokerage company offers 350+ CFDs instruments of different types of assets like forex, commodity, stocks, cryptocurrency, metals and indices. 

• HFTrading

HFTrading is the operating name of CTRL Investments Limited and was founded in 2019. It is regulated and sanctioned by the New Zealand Financial Markets Authority (FMA) and the Australian Securities and Investments Commission (ASIC). The brokerage giant offers 350+ CFDs on various assets, including cryptocurrency, forex, stocks, metals, indices and commodities. 

The Bottom Line 

It is the complete article on the forex trading strategy; as we talked about the various types of strategy select the best one and tried it out on the demo account. TradeATF offers the best demo account for the traders to learn the forex trading strategy and to use on the demo account first, then invest with the actual money in trading.