By Lorenzo Billie There are a number of various strategies for getting the most out of the forex market. Before you start reading reviews such as Soltechx Review and choosing the broker, here are four examples of proven strategies in this area.
Forex day trading
This is a method that comprehends opening a large number of trading positions per day. Sometimes more than ten positions per day. The goal is to spread the risk as much as possible over several different forex trading orders. The other rule to follow in forex day trading is to shut all positions before the trading session ends to avoid swap fees and to avoid some gaps when the markets open again. A profitable Forex day trader is an investor who obtains more than 50% of winning trades per forex trading session.
Carry trade on Forex
This Forex strategy involves borrowing or selling a currency at a low-interest rate with the objective of using that sale to buy another currency with a higher interest. Profits are created with the positive difference in interest rates. This is an alternative to the classic buy low and sell high approach. This is a risky strategy since it is highly dependent on exchange rates between currencies.
Scalping Forex trading
Scalping is often related to day trading since this method aims to get the maximum profit from micro variations in prices on the forex market and on short-term positions. The leverage effect largely facilitates the collection of gains with scalping without increasing your investment.
Trend trading on Forex
A long-term approach to Forex since the objective of this type of investment is to follow the trend of a pair over the long term in order to maximize profits following major economic news. Unlike other forex trading strategies that rely exclusively on technical analysis, trend trading relies on fundamental analysis. These are risky positions but very profitable when they prove to be successful.
Find the best currency pair to choose for forex trading.
We tend to take a pretty clear point on the best currency pair to trade on Forex. Therefore, we advise beginners to concentrate on major currency pairs, as they are the most liquid and fluctuate less than other currencies.
There are, of course, other equally lucrative opportunities. Cross-currency pairs are all pairs that do not integrate the US dollar but use at least one of the other 3 major currencies: EUR (euro), GBP (pound sterling) and JPY (Japanese yen). Depending on market conditions, cross (or secondary) currencies may be a lower risk investment than a major’s currency pairs like EUR / GBP, CHF / JPY and GBP / AUD.
Finally, exotic currencies relate to all other pairs that are made up of a major and an emerging currency. The main setback of these currency pairs is the cost of forex trading which can be quite high since they are less liquid. Ex: EUR / TRY, USD / SEK (US dollars / Swedish kronor), USD / SGD (US dollars / Singapore dollars).
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