If you are already familiar with the basics of foreign exchange, you know that profit is derived from rate dynamics. But how exactly should you go about planning your trades? It seems the numerous micro and macroeconomic factors swaying currency values make the forecasting extremely complex. However, it is possible to find an existing Forex trading strategy that will work for you.
Naturally, a trader has to possess certain knowledge about the workings of the market, but you do not have to be a savant. Forex trading has been around for decades, and it is now possible to choose from a range of proven approaches. A reliable broker in South Africa, such as Alpari, provides abundant educational material on ways to trade thoughtfully.
Table of Interest
The Value of Planning
Rash decisions are never wise. In the world of stocks and currencies, participants have to assess the circumstances and take action accordingly. Reliance on gut feeling is unacceptable if you aim to make success consistent. After all, any finance trading involves the risk that is very real. Here are several methods every trader in Nigeria ought to be aware of.
Bear in mind that any trade could bring profit or loss depending on its timing. Take advantage of every opportunity to gain experience safely. Take time to study market trends and charts, use the demo mode or copy trading to learn the basics.
The Four Styles
Before delving into the strategies, it is worth considering the existing styles. Traders approach the activity differently, depending on their preferences. The most favored styles are these.
1. Day Trading Style
This is one of the least complex approaches, which is why it is favored by neophytes who are only developing their foresight. As the term suggests, you exit the trade before the play is closed for the day. This way, you safeguard your funds against possible dramatic overnight changes.
2. Scalping Style
The method involves quick trades, which may last only minutes. In this scenario, you hope to profit from beating the spread between the bid and offer very quickly, gaining some points while the trade is open.
3. Position Style
This method is not for the impatient ones, it requires self-discipline. As it involves long-term dynamics, it is hardly suitable for newbies. Experienced traders, however, reap sizeable gains thanks to big-scale price shifts.
4. Swing Style
Here, you need focus and concentration to spot short-term shifts. On average, such traders check the bars every half an hour.
Possible Strategies to Implement
Consider these basic courses of action. You may always try them out on a demo account before engaging in real trades. This is the wisest approach, as there are no risks involved. Once you feel confident in implementing your strategy of choice, you can start working with real money.
1. The Bladerunner
Aside from denoting the cult classic of sci-fi, the name is also applied to a specific group of Forex traders. They determine the most favorable currency purchase price based on the price action. This works for novices and veterans alike.
2. Daily Fibonacci Pivot Trade
The term sounds more complex than it actually is. It applies the famous Fibonacci numerical sequence to price charts. As a result, traders are able to forecast the most likely exchange rates.
3. Bolly Band Bounce Trade
This method involves the search for regularities and patterns. If there may be discerned in the movements of currency values, traders use them to gain profit.
Use Professional Assistance
Your broker should be able to provide guidance on these and other popular strategic approaches. And if you are still afraid of mistakes, you can always use the services of a copy trader. This way, your funds will be invested by a professional, and you can observe their trades replicated in your account.