Even those who have been trading in forex for a while will agree – forex is complex. The fact is, as the markets are based on the economic performance of territories all over the world, anything can change at very short notice. Spread strengths go up and down, and overnight, volatility can make one pair suddenly much less lucrative than another.
Forex, however, is exciting. There’s little wonder why so many people are still trading on the international markets. To get to where you are today with forex, you may have spent some time looking into the best 7online.io reviews, or you may have just built up your knowledge through active participation. The fact remains, sources such as Leaprate (linked above) remain great fonts of knowledge, even for experienced traders.
Forex trading techniques can be complex — but once you’re starting to get comfortable with trading internationally, it’s time to start really upping the ante — these markets can be fast and furious, and you’re going to need to keep up! Here are a few tips and tricks you may wish to keep in mind.
Focus on trends
Trend trading, to some, may seem like a little bit of a maverick move. After all, it’s the process of ‘riding a wave’, or making decisions based on temporary curves. Trends come in all lengths and volatilities, meaning that while novice traders may not feel comfortable using this methodology as a safety net, it could reap interesting long-term results for experienced traders.
The ratio of risk to reward with this technique is appealing if you know what you are looking into. If, for example, you spot an uptrend in USD/EUR that’s peaking high with very little downturn, you may wish to take advantage. This seems like a fairly obvious move to make, but it is still a trend — which means it won’t be around forever. It’s worth setting up clear exit points based on risk and reward.
Plenty of experienced traders prefer to chase the small, frequent wins. This often means getting into forex scalping, where you will crucially buy and sell based on the smallest of movements in the exchange. This might not be appealing to all traders as it requires a lot of regular insight, and frequent checking.
However, this active form of forex analysis, while certainly not as passive as the trend-based strategy above, can still be useful in helping you to build a strong record of smaller profits over a long period. If you are frequently checking the markets and position yourself at opening time for multiple pairs, then it might be worth getting in and back out again to claim some small, but worthwhile, wins to stack up.
Try your luck with positions
Forex position traders are those who really are in it for the long haul. Position trading is perhaps the reverse of scalping, in that you may position trade for years at a time before you stand to make any serious money. Crucially, position trading is all about sticking to one position in the faith that a pair will make bank in the long run. Whether this is a move that is out of faith or out of deeper analysis, it remains to be said that this is certainly not a move for the faint of heart.
What’s more, position trading is likely going to appeal to forex traders who already have a large stock of capital available to invest. If you are just getting started in forex and are not necessarily flush with starting cash, then you may prefer to go for the smaller wins while you find your feet. However, it stands to reason that those who have been in the game for a while will likely want to set up a long-term plan for forex through a position. It’s all down to your gut instincts, and how much money you have to cement yourself for the long haul — at least for now.
Do all these strategies work?
The beauty of forex lies in the fact that it can help to create some massive income if you are willing to put in the time and effort. Trading in general — whether it’s Bitcoin, forex or otherwise — takes nerve and determination. There are no one or two ways that drive perfect results, so it can certainly be worth taking a closer look at strategies and options that reflect your risk attitude and capital the best.