5 Forex Trading Strategies

Pips Wizard Pro

5 Forex Trading Strategies

If you’re new to trading currencies online and unsure where to start, it helps to understand popular forex trading strategies. Forex comparison site ForexBrokersAZ.com discusses 5 Forex trading styles in detail.

Scalping

Scalping involves buying and selling currency pairs online in small high frequency trades.

It’s designed to capitalize on small changes in exchange rates typically between 5 and 15 pips. A scalper can spend hours on end monitoring the markets, pushing trades through within minutes of closing a previous trade. The best trade opportunities arise when the foreign exchange markets become active – typically around news events, data releases or when trading sessions overlap across international markets.

Stock chart showing levels of support (4,5,6, ...
Stock chart showing levels of support (4,5,6, 7, and 8) and resistance (1, 2, and 3); levels of resistance tend to become levels of support and vice versa. (Photo credit: Wikipedia)

Make no mistake, scalping isn’t for Forex trading beginners. It requires a strong understand of the Forex markets and a clear view on where the markets are going. For this reason, scalpers usually trade with brokers that offer Electronic Communication Networks – also known as ECN brokers – because these brokers deliver faster execution and can provide insights into where the markets are heading through ‘Depth of Market’ (DoM) tools. DoM sounds technical but it’s nothing more than a window onto the orderbook, with volume and price information about buy and sell orders.

Day trading

Day trading involves opening and closing a Forex trading position on the same day – before 5pm New York time. The best day trading opportunities arise over the course of the European and US sessions. Liquidity reaches its peak when these sessions overlap.

Day trading opportunities can be found using intra-day charts with medium timeframes ranging anywhere from 15 to 30 minutes to 1 to 2 hours. Most day traders perform technical analysis on charts to identity support and resistance levels and other patterns.

If this is your preferred trading style, you’ll want to familiarize yourself with the MetaTrader 4 (MT4) platform. It comes loaded with of indicators you can use to perform technical analysis. Click here for Forex brokers that support the MetaTrader 4 platform.

Swing trading

Swing trades unravel over a longer period of time, typically 2 to 5 days with a view to make a 100 to 250 pip mark-up. Swing traders uncover trading opportunities through charts, using technical analysis to identify support and resistance levels and other patterns in the data.

Position trading

Positing traders have an even longer investment horizon: they typically keep their positions open anywhere between 5 and 50 days with a view to make a 250 to 1,000 pip profit. This is where the frontier between technical and fundamental analysis blurs as position traders can use both tactics to uncover trade ideas.

Value investing

Last but not least, value investors such as Warren Buffet or Benjamin Graham have a long term investment horizon. They can hold their positions anywhere from 1 month to several years if they spot a long term trend. Value investors can use both fundamental and technical analysis to identify potential trade ideas. However, longer term considerations such as economic imbalances, interest rate differentials and geo-political considerations often come into play.

VN:F [1.9.22_1171]
Rating: 10.0/10 (2 votes cast)
VN:F [1.9.22_1171]
Rating: +1 (from 1 vote)

Related Posts:

All the things you need to discover about Forex

Pips Wizard Pro

With an average daily turnover of virtually $4 trillion in the global foreign exchange market, or Forex, it is easy to see why more and more people at large are taking fascination in buying and selling foreign currencies. Still, the prospect of trading currencies in this “foreign” market can be overwhelming, even for skilled stock market speculators.

Continue reading All the things you need to discover about Forex

VN:F [1.9.22_1171]
Rating: 9.5/10 (2 votes cast)
VN:F [1.9.22_1171]
Rating: +1 (from 1 vote)

Related Posts:

Tips For Locating A Forex Trading Blog

SetForget Pattern Profit

Locating A Forex Trading Blog

Reading up and educating yourself prior to investing is an important thing to do. The problem is you may not know much about the investment and you need to find a blog on the topic. This is when you should follow two tips for locating a Forex trading blog which can help you so you are not misled with the information which is being presented on other sites.

The first tip you need to use is to look at the age of the blog. If the blogs are older then they have experienced some of the downturns the economy has had and know how to handle them. So you can easily learn more about the way to battle through the changes in the economy because of the changes they have had to cope with before.

Another tip you need to use is to find out exactly how they are doing the trading. For example some of these blogs will be using a computer program, but others do this by hand. So you need to know for certain which method they are using so you can duplicate the effort to make money.

Investing your money in currency can be an exciting way to make money. However, if you are new to this you need to have some form of an education on what you should be doing. This is when you need to have some tips for locating a forex trading blog and know you are using the best one around for your education.

VN:F [1.9.22_1171]
Rating: 9.5/10 (2 votes cast)
VN:F [1.9.22_1171]
Rating: +1 (from 1 vote)

Related Posts:

4 Good Reasons To Look At Forex As An Investment

Pips Wizard Pro

These days there are many investors wondering if they should trade the Forex market or not. Many of them believe that Forex is only for large financial institutions, but this is not the case. While there are certainly plenty of big financial companies in the market, there are plenty of small investors in this market also. In reality the Forex market gives equal opportunity to small and large investors.

There are a number of reasons why you should consider putting money in foreign currency. Here are 4 of the best:

Liquidity

The Forex market is very liquid. To give you an idea of the size of the market, an average of $3,200,000,000,000 changes hands around the globe every day in the currency market. Whereas with the stock market you might have trouble getting rid of your investments, this will not be an issue with currency. In other words, there is less chance of getting stuck with an investment as it plummets.

Cheaper

The liquidity also gives you the chance of tighter bid/ask spreads. This means you will minimize the expenses of investing. The majority of broker platforms do not make you pay an individual cost for every transaction, because they earn their money by the spread from the quote for the various currencies.

Save Time

There are lots of Forex trading robots that will actually make your investing decision for you. If you use them then you can earn passive income, because you never have to touch them. Just keep in mind that you should not trust these robots for 100% of your Forex investments. If you have the time, it would definitely be advisable to invest yourself, because a human investor is always more profitable.

More leverage

As opposed to many other financial markets, the Forex market gives you huge amounts of leverage when investing. An investor with just $200-300 can often invest $10,000s of money in the market. But while lots of leverage can make you a huge amount of money, you can also lose a lot as well. So be cautious when using leverage.

Conclusion

Forex trading can be very profitable when used correctly. Investors globally are turing to it as an investment vechicle with stock markets becoming more and more uncertain. Above are 4 reasons which might make you consider putting your money into foreign currency. Just make sure to start slowly and learn as you go, and you will increase your odds of success.

Author Pete Southern is an active trader of forex and stock markets. Pete submits market reports to many online publications like www.forexrate.co.uk and is avid follower of the economy.

VN:F [1.9.22_1171]
Rating: 9.0/10 (2 votes cast)
VN:F [1.9.22_1171]
Rating: +1 (from 1 vote)

Related Posts:

Understanding and Using CFD Trading Strategies

Pips Wizard Pro

CFD Trading Strategies – The Advantages

Contract for Difference is a derivative used in the financial markets and is a commonly used tool in trading Forex. The CFD is a part of the trading strategies of many Forex traders due to its reliability and effectiveness. There are many reasons as to why the traders use the CFD Trading Strategies.

  • It allows you to hold a position without having to rely on financing. When the day ends, you can hold on to the position you had without taking any actions overnight. It is a great way to continue and consolidate a strong position in the Forex market for any trader.
  • The leverage that you can enjoy is one of the best. There are few other marketing tools which offer you so much leverage in Forex trading. You can trade in amounts far greater than you have in your account, without having to replenish it. This gives you the opportunity to make a far greater profit.
  • The Forex market is the most liquid financial market in the world and the liquidity can be enjoyed by you through a CFD trading strategy. You can enjoy a far deeper level of trading with the increased liquidity that you have.
  • The costs of trading will be lower than the other trading strategies because the commission rates which you will be paying are comparatively lower. This means that you can enjoy the services of a broker without having to pay too much money.
  • Quick movements in the Forex market due to high volatility enable the traders with CFD strategies to make profits without having to sit all day and watching the gradual movement of the prices. They stand to benefit far more from sudden movements.

You get to save time and energy which you would otherwise spend sitting and staring as the information is displayed on a screen in front of you.

How to Use the CFD Trading Strategies

With all these advantages, the CFD trading strategies are bound to be a popular choice for the Forex traders. Many of them have been using such strategies and making hordes of money through it. However, there is no guarantee that you will end up becoming rich by using CFD. There is no defined formula which you can use and make a profit through CFD. The leverage that you enjoy gives you a stronger position than you would enjoy otherwise from which you can use your skill to trade strongly. In fact, you will be able to know when you should enter and when you should exit the market.

The best thing about CFD Trading Strategies is that they allow you to carry over the advantage that you are enjoying from your position today. This means that when you return tomorrow, you will be more or less in the same position on which you stopped yesterday. The maximum effect of this can be seen in borrowing. Any amount you borrow today will have to be paid the next day but the amount of interest that you pay on the borrowing will be the one that was levied when you made the original borrowing.

Small Change, Big Profit

Another benefit is that even a small change in the market entitles you to a great profit. A prerequisite is that you should be in a position from where you can take advantage of the momentum shift. For this to happen, you have to withdraw your profits on a daily basis. A shortcoming here is that the fees and other costs you incur will be deducted from the profits. The amount that you receive each day will be significantly lower than if you waited for it to accumulate for a while before receiving it. However, you will be able to minimize the risk and be in a position from which you can maximize the profit from even a small price change.

Get your Forex no deposit bonus right now! Visit our Forex bonus page to discover more bonuses.

VN:F [1.9.22_1171]
Rating: 10.0/10 (1 vote cast)
VN:F [1.9.22_1171]
Rating: +1 (from 1 vote)

Related Posts:

Choosing the Right Operating System for your Forex VPS

SetForget Pattern Profit

Have you ever thought that VPS for Forex trading can enlarge your profits and reduce loses? It’s 100% truth. But another topic is what operating systems to choose for stable execution.

There are few operating systems available in the market for your VPS such as Windows, FreeBSD, and Linux.

In order to choose the right operating system for your VPS, following points should be taken into consideration before you make your purchase decision:

What is the regular fee?

From a buyer’s point of view, one may have a pre-conceived notion that Windows VPS costs more than a Linux VPS, and hence you prefer to buy the latter. But, whether you have purchased the apt product and made a pertinent commercial transaction depends on what particular kind of feature you want to use while operating your VPS.

Linux and FreeBSD does not support a lot of programming languages which Windows does, such as .NET. Thus, it is always advisable to shell out a few extra bucks every month and get a Windows based VPS, if you are using a .NET application.

On the other hand, if you do not have any finicky purpose for your VPS, then acquiring Windows will turn out to be an expensive and knotty deal for you. Most web software which run on Linux and Unix servers, might work on Windows but might get interrupted in its next product update.

Full-time support

Though most of the VPS companies offer excellent after sales service, still they will not be able to resolve all your minute technical queries regarding your server. Hence, it is recommended to gain control on your server with an ardent approach.

Using the command-line, Linux setting can be altered, since it encompasses the most efficient control panel interfaces. Though Windows is less user friendly, many people find it much convenient to change settings in it.

Uptime and stability

Linux users have avoided using Windows due to its regular crashing and instability. Big multinationals which use Windows based VPS in their system, face frequent technical problems and major troubleshooting issues. In order to avoid huge loses, these companies then hire technical experts to decipher the critical flaws in Windows. However, the current version of Windows promises to offer much more static service to all its users. If you intend to use Windows, make sure you are backed with a good VPS system.

Does it fast enough?

Linux commenced as an individual server operating system, whereas windows embarked as an additional server mode. Hence, it is evident, that compared to Windows, Linux runs software on a much more faster pace and with adroitness, especially when any Windows user encounters trouble to access any website from VPS.

And the main point – MT4 works only on Windows based VPS. So, if you are MT4 trader, you need ONLY Windows VPS.

Alexander Collins is a Forex software developer and blogger. Don’t miss your chance to download Forex trading tools for free from his blog.

VN:F [1.9.22_1171]
Rating: 10.0/10 (2 votes cast)
VN:F [1.9.22_1171]
Rating: +2 (from 2 votes)

Related Posts: