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FOREX TRADING STRATEGIES #1

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TRADING STRATEGIES #1

Forex trading strategies that work #1 — Position trading

Position trading is a longer-term trading approach where you can hold trades for weeks or even months. The timeframes you’ll trade on are usually the Daily or Weekly. As a position trader, you mainly rely on fundamental analysis in your trading (like NFP, GDP, Retail sales, and etc.) to give a bias. Also, you might use technical analysis to better time your entries.

Let's Say You analyze the fundamentals of EUR/USD and determine it’s bullish. But, you don’t want to go long at any price. So, you wait for EUR/USD to come to Support before taking your position. Now if your analysis is correct, you could enter at the start of a new trend before anyone else.

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Now, let’s discuss the pros and cons of position trading…

PROS

Don’t need to spend much time trading because your trades are longer-term Less stress in your trading as you’re not concerned with the short-term price fluctuations A favorable risk to reward on your trades (possibly 1 to 5 or more)

CONS

Require a firm understanding of fundamentals driving the market Need a larger capital base because your stop loss is wide May not make a profit every year because of the low number of trades And lastly… There’s a trading strategy called Trend Following (which is similar to position trading). The only difference is Trend Following is purely a technical approach that doesn’t use any fundamentals.

Forex trading strategies that work #2 — Swing trading

As a swing trader, your concern is to capture “a single move” in the market (otherwise called a swing). So you’ll likely:

Buy Support

Sell Resistance

Trade breakouts

Trade pullbacks

Trade the bounce of the moving average

Thus, it’s important to learn technical concepts like Support & Resistance, candlestick patterns, and moving average.


Now, let’s discuss the pros and cons of swing trading…

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PROS

Don’t have to quit your full-time job to be a swing trader It’s possible to be profitable every year because you have more trading opportunities

CONS

Won’t be able to ride big trends Have overnight risk Now, if you want to learn more about swing trading, then The Complete Guide to Finding High Probability Trading Strategy will help immensely. Let’s move on.

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High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to Platinum FX's Risk Disclosure. Additionally, the content of this website is for information purposes only and it is not intended as a recommendation or advice. Any indication of past performance or simulated past performance included in advertisements published by Platinum FX is not a reliable indicator of future results. The customer carries the sole responsibility for all the businesses or investments that are carried out at Platinum FX. Regional Restrictions: PLATINUM INFOTECH LIMITED do not offer Contracts for Difference to residents of certain jurisdictions such as Afghanistan, Hong Kong, Belgium, Japan, the United States of America and some other regions. For more information please refer to our Customer Agreements.

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