A Beginner’s Guide to Forex Trading

Trend line trading is one of the simplest trading strategies that can help you make consistent profits in Forex. Trend lines show where the price has been and where it may go. if a trend line breaks, it is an indication that a reversal may be imminent and that you should take action to protect your position. There are many ways to use trend lines like building support and resistance levels, going long when price bounces off of trend line or sell short when price comes down to a support level.

The Momentum Forex Trading Strategy is an extremely simple forex trading system that allows you to trade based on the momentum of a currency pair and without requiring any elaborate pre-market analysis.

A Momentum Forex Trading Strategy is one which uses the trend of the market prices to predict the direction in which they should be traded. A momentum trading strategy is based on having a target price, without using any economic indicators to trade. The main distinguishing feature of a momentum trader is that most of his trades are based on either an attempt to take advantage of a gap up or a gap down in market prices after a news release.

The Simple Moving Average strategy is a very popular trend following system. When the short term moving average crosses the longer term moving average from below, it’s an indication that a new uptrend has begun. However, when the short MA crosses from above it’s a strong indication that the trend is about to end and that a new downtrend has just begun. The indicator uses exponential and linear weighting and also allows you to select which period(s) you want displayed—1, 2, 3 etc.

The Dual Stochastic Forex Trading Strategy is a combination of two different Stochastic Oscillators – the Slow Stochastic and the Fast Stochatic. The Slow Stochastic Registers a buy signal when price rises after diverging from the slow stochastic. A Sell Signal is generated when price falls after diverging from the slow stochastic. In addition, the price reacts differently to Slow and Faster stochastic signals.

The Dual Stochastic Forex trading strategy is one of many strategies out there, but it’s also one of the easiest methods to understand and use for trade entry. The Dual Stochastic strategy is a short-term trading approach.

The Breakout Strategy is an advanced trend-following strategy designed to capture a large percentage of the biggest Forex Market moves. The Strategy trades with a tight stop-loss and is based on: breakout of resistance, confirmation from other market data (for example exponential moving average EMA crossover or support/resistance), increase in volatility and significant momentum indicators.

The purpose of this strategy is to buy a breakout move, but with the risk of being in a false breakout. If you have been trading for some time you already know that markets are not perfectly efficient and often overreact to news, so by definition false breakouts often occur. However, by using a stop-loss it will help limit your losses and will allow you to participate in the market volatility when it breaks out.

A day forex trading strategy is a pre-planned strategy for trading the currency market in the short term. There are different types of strategies that one can use, whether it is mechanical, fundamental or technical analysis.

The objective of day trading is to make small profits during the trading day. With a short time frame it is important to act quickly, so you can jump on opportunities as they arise.

Price Action Trading Strategies are based on the observation of market price behavior. You can make money using Price Action whether a market is trending, ranging or consolidating. Have you ever sat back and watched the market move?  Price action trading strategies are about learning to decipher what the market is telling you through the price movement. The primary difference between day trading strategies and price action trading strategies is time frame and the amount of indicators used.

For most traders, price action strategies are the best way to learn forex trading because they require no indicators. Price action trading is the interpretation of market price movements. In other words, a price action strategy is a trading strategy based on price movements only. Price Action Trading Strategies (or PATs) are one of the fastest ways to learn how to trade forex. This makes them perfect for new forex traders and those who don’t have a lot of time on their hands.

Positional trading is a shorthand way of describing a broad category of forex strategies that typically take large positions based on anticipated price moves. These trades are otherwise known as directional trades, although this term has a narrower meaning in the industry than what we’re using here. Essentially, positional trading strategies are those that use market entry and exit with profit targets to achieve profit or loss objectives. Positional traders may utilize technical analysis (observable price action), fundamental analysis (economic news) or both.

It’s a strategy that can be profitable when the interest rate differential between two countries is high. Forex brokers make it easy for speculators to open leveraged positions by providing trading accounts with low margin requirements. Carry trades usually involve borrowing in one currency and using the funds to purchase another. That way, gains on the asset purchased are magnified and losses on the borrowed currency position are restricted.