It is quite hard to imagine entering the Forex trading world without adopting a specific business strategy. It is highly risky because you don’t even know what to do when there is a bearish or downward movement in the market. In addition to this, it is recommended that you follow a style while entering a trade because, in certain market conditions, traders don’t have any alternative way to handle a loss. But following a system can help them overcome this situation.
How to choose a strategy?
Many beginners become confused about this issue because they don’t understand which one can be a perfect plan for themselves. Don’t worry. We are here to make everything easy for you. Before choosing a plan, you have to look at a few issues –
There are two different types of timeframe in the Forex industry – shorter or lower timeframe and longer or higher timeframe. In a shorter timeframe, the investors have to retain the currency for a short period ranging from a few seconds to a few hours. On the other hand, in a longer timeframe, the traders have to hold the currency for several days, weeks, and even months. To get more info, you can read posts from experts in the Mena region on Saxo’s broker website.
- Methods of analysis
After choosing the timeframe, it is time to find out the process of analysis. There are two kinds of investigation in the CFD industry – fundamental and technical analysis. In fundamental analysis, an investor has to deal with several events. He will have to determine whether the event can affect the industry or not. On the other hand, a technical analyst deals with the chart. There are several technical indicators that only use the graph’s data and its historical performance to find out the perfect point to enter in trades. If you think that fundamental analysis can be easier for you, you should carefully choose the strategy.
The Best and most Robust Trading Strategies
Scalping is regarded as the riskiest and most successful business procedure. It is a risky style because a trader has to make a decision quickly, and the decision should be accurate. In this business plan, the financial instrument has to be retained either for a few seconds or a few minutes. The maximum duration doesn’t exceed 15 minutes in this trading style.
You can earn a decent amount of profit if you successfully make a decision. At the same time, the entire trading account can be destroyed by a single blow. So, the first thing in this style is the timeframe, which ranges between a few seconds to minutes. The second issue is the method of analysis. In scalping, you have to use technical indicators to predict the movement.
2. Day trading
This is similar to scalping, but the difference is – in this strategy, the bought currency needs to be held for a few minutes or hours, but you have to execute your deal within the day. It is also a short-term business, in which technical indicators must be used. This is why professionals always recommend the newbies to become experts in the technical indicators at the beginning. Instead of jumping into the real trades, use the demo accounts.
Like scalping, this strategy is also risky because a single wrong move can blow your account. Still, it has potential, and you can make money by making accurate decisions quickly.
3. Position trading
This is a long-term business plan, and one has to hold the bought currency for a longer period of time, ranging for a few days or even months. This is the strategy where you have to focus on fundamental analysis. Interest and inflation rates, unemployment rates, GDPs, and the economic performance of a state determine the ups and downs of the price. Therefore, this method is regarded as an ideal plan for beginners.
These are the three most powerful and successful business strategies. One should learn more about them to implement them in the real market.