Forex trading is an easy and convenient way to invest one’s money for comparatively short time periods and get a quick profit. While some people think that foreign exchange is not for ordinary people without any financial background, this is far from truth. In fact, any one can register on one of the trading sites and start earning money. Although, there one has to have certain knowledge about basics of trading and financial decision-making. Also, a beginning trader has to consider
The dimension of trading
Whether the system is automatic or discretionary
One’s readiness to risk
Having figured these out, it is high time to choose the appropriate strategies in forex trading for beginners. For new investors, it is better to focus on the simplest and the most bulletproof ones.
Trading Strategies for Beginners
A Breakout Strategy
The chart with a bunch of candlesticks that show the way price goes up or down can help you determine when the new trend is going to occur. In order to do that, you must know whether these is a breakout – noticeable highs or lows that occur outside of consolidation line. A breakout that occurs for a long period of time suggests there is a long-term trend, and a short breakout speaks about short-term trend correspondingly. Find out more about the strategy in forex trading strategies for beginners pdf guides available in the web.
Pin Bar Strategy
One of the easiest technical analysis strategies and the good one for beginning traders. The rule behind this strategy is that former resistance becomes a support. This activity appears on the chart in the form of the so-called “bullish pin bars.” These are bars with short bodies and long tails, that signal that market is about to start forming a rising or falling trend.
Inside Bar Strategy
This strategy presupposes trading in the direction of a major trend. When there goes a bar with a large body, called “mother bar,” followed by a bar with a smaller body, called “insider bar,” the emergence of continuous trend is highly likely. So, when you see that one smaller bar that goes after a langer bar, which can be completely engulfed by the latter, that is a good sign to open a trading position.
Moving average Strategy
Yet another forex trading strategy for beginners. Very often, investors use moving averages to determine the timing for a profitable buy or sell. When there are two moving averages on the chart, the point of there crossing is a signal to start trading.
Following the Trend
What is a trend? On the chart, the trend is identified by the trendline that connects the series of highs and lows. When following the trend, you have to pick the time when to buy or sell the currency. In the case of downward trend, wait for the price to go up and then sell. In the opposite case, wait for it to go down and then buy. Trends can be short, medium, or long term.
With the help of forex trading strategies for beginners, you can understand the underlying principles of trading on foreign exchange market.