The Forex market, with an average daily trading volume of over $6 trillion, is the biggest financial market in the world. It involves traders worldwide and is open twenty-four hours a day, five days a week. If you are someone who is looking to get their feet wet in forex trading, then this article is going to be really important for you as we’ll discuss some crucial trading strategies along with some useful tips that will help you do better in this highly competitive market.
What is Forex Trading?
Forex trading is the practice of buying and selling currency pairs to make money from the interest rate differential. The forex market has an important role to play in international trade, but traders also use it to make speculations. Forex traders often have to create an account with an online forex broker to carry out their trades, including purchasing one currency and selling another.
Forex Trading Strategies
Each forex transaction has two basic forms: A long trade and a short trade. When traders take a long position on the trade, they bet that the currency’s value will increase in the future, which will eventually enable them to benefit. On the other hand, a short trade involves a wager that the currency pair’s price will decrease in the future.
To correctly predict if the price of a currency pair will go up or down, traders may use a variety of tools and indicators. These tools may be based on technical or fundamental analysis, such as breakout, moving average, or looking closely at the economic data.
Based on it, traders can use four sorts of trading techniques. These strategies broadly depend on the volume and time period a trade is held open. Let’s take a close look at the four basic forex trading strategies:
Scalping
In scalping, positions are held for only a few seconds or minutes at the max. In this strategy, traders capitalise on small pip movements to make small profits, which are calculated accurately using a forex pip…
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