Online trading is not easy and requires a number of factors to take into account. Firstly it is important to be well aware of Forex market, which is nowadays possible due to the great number of trading e-books or other learning materials achievable in many financial blogs.
Secondly, it’s essential to have experience in trading which doesn’t mean that you should trade with your real money and meanwhile learn its principles. Currently there exist such trading platforms that provide demo account.
After having gained practice on demo account you can start earning money by putting your real money into risk. And thirdly, in order to minimize the level of risk and maximize the level of income you should have a well established trading plan, follow certain trading method and have a well developed trading strategy.
Choosing a right trading strategy is at the center of traders since it’s one of the essential ways of making a profit. They follow different trading methods and apply various techniques to work out a strategy that will contribute to the profitable trading.
In order to be able to decide on a good strategy and develop efficient currency trading it’s important for traders to be familiar with the most popular strategies used by most successful traders.
Such kinds of strategies are:
- Scalping
- Fading
- Momentum
- Daily Pivots.
Scalping is based on making profit depending on small price movements. Scalpers buy or sell stocks then sell or buy them at higher or lower prices thus making a profit. Such small gains and possible prevention from great losses in the end can result in huge profits.
The price target here is achieved after the profitability is attained.
Fading that is referred as a quite controversial investment strategy is usually used to trade versus the dominating trend. Here you should bear in mind that the given strategy contains high level of risk and requires following certain rules. And the risk can be reduced by deep and intricate analysis.
The objective: Buy when the price is falling and sell when it is rising.
In spite of the volatility of this strategy it’s possible to make noticeably high short-term profits.
The price target here is that buyers again get involved in trading.
Momentum strategy lies on the basis of news releases or finding strong trend movements supported by high volume. So buying news releases and riding a trend until it displays signs of reversal is a certain type of momentum strategy.
The price target here is the decrease of volume and the emergence of bearish candles.
Daily Pivots is a strategy by which traders get profit depending on the daily volatility of currencies. They buy and sell at the respectively lowest and highest prices of the day.
The price target here depends on the next sign of a reversal.
Conclusion
Think about each strategy and follow the one you think is more suitable for you. Measure your risk tolerance; if you are too risk averse than scalping will be much better or if you want to take risky steps and have immediately huge profit then Fading is more advisable.
Think about your psychology and abilities, try to understand which strategy will help you earn more money and most importantly do not follow others.
They may apply a certain strategy and have success, but this doesn’t mean that the same strategy will be useful for you too. Give importance only to you and your potential. Follow the trading method you feel rather reliable and work out the strategy you think will help you achieve profitable trading.
Author bio:
As an experienced content writer Anahit appreciates the unique style and original way of writing. Each article should be expressed in such a way that you can listen to “the voice of author”.
This is actually what she takes into consideration while creating content. The domain in which she is interested and therefore writes articles is Finance. You can find her articles on http://www.trading-techniques.com/ and http://www.money-market-trading.com/.
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