5 Useful Tactics For Novices In Order To Become Successful Forex Traders

Learn How to Become a Successful Forex Trader

The forex trading market is the biggest and the most liquid financial market around the world. The daily trading volume, based on the 2019 statistics is estimated at $6.6 trillion. As time goes by more and more people enter the market with one main reason - to generate more money. 

Some people trade forex as a side-hustle, while others trade for a living. In both cases, those who want to be successful in the market, need a strategy. If you are a novice trader then this article is for you. In this piece of paper, we are going to provide you with  information on which are the most useful strategies in order to reach success.

Price Action Trading

When it comes to Forex market strategies, there are two main approaches, including technical and fundamental analysis. You may use a wide range of price action tactics, from breakouts to reversals to basic and complex candlestick patterns. It’s worth noting that price action strategies, don't often include technical indicators, but if they do, they should be utilized carefully and just as a supplementary tool. Moving averages, for example, are used by certain traders because they may assist to spot trends. 

Price action trading has several advantages, and one of the main ones is that it keeps your charts uncluttered and reduces the likelihood of information overload. When you start using this strategy you need to be aware of the basics of Forex trading, which allow you to make this trading approach more effective. Multiple indicators on your chart might provide contradicting signals, which can lead to confusion, particularly for newcomers to the market. And that’s where the price action trading strategy shines. Reading the price activity may also give you a better sense of the market and help you spot trends more quickly.

Trend Trading Strategy

Trend trading as the name suggests means that investors start trading based on the current trends in the currency markets. For this strategy, it is always convenient to use some technical indicators, in order to determine whether or not a certain currency is going to trend. 

For example, if you see that the USD is going to increase in price when it is low-trending, you can purchase the asset and wait until the price reaches the desirable number. After that, you can sell the asset and see some profits. 

In addition to that, when you see that some currency is high-trending and it’s not going to continue the profitable way, if you hold an asset, you should sell it. Otherwise, you will lose your funds invested in an asset. The advantage of this strategy is that it is easy to use and it doesn't need complex analysis.

Day Trading Strategy

If you are a lover of short-term investments, day trading might be for you. In contrast with other strategies, day trading doesn’t require you to buy and hold a certain asset. Instead, you buy ა currency and hold it for a day or a minute. In these terms, it is quite similar to scalping. However, the main difference between day traders and scalp traders is that day traders usually trade with the help of 15 min. or 1-hour charts, while scalpers usually use 1-minute charts. 

Moreover, day traders take things a little more slowly and aim to identify two or three solid trading chances every day, while scalpers often initiate more than ten transactions (some really active traders may even open more than one hundred). 

As a day trader, you can close out your positions before the end of the day, but you don't have to deal with the stress of scalping.

Swing Trading

Trading currencies using technical indicators that indicate an anticipated price shift is a short-term method known as swing trading. This pattern might last anywhere from a few days to many weeks. It should be stated that those traders who prefer swing trading do usually use technical analysis and indicators. While long-term value isn't a consideration, swing trading focuses on profiting from highs and lows in currency movement. 

These traders must be patient and disciplined in order to succeed. Waiting days for a great chance to present itself, or maintaining a transaction open for many days despite running a loss, is not uncommon in the world of financial trading. Some traders lack the patience to hold onto their positions long enough, and as a result, they end up losing money. The main advantage of this strategy is that it has smaller stop-loss orders. So when you start swing trading you will be more safeguarded from losing your sums of money.

News Trading

Thanks to news trading, it is possible to benefit from the market movement that has been prompted by breaking news stories. This might be anything from a meeting of the Federal Reserve Board to the publication of economic statistics to an unanticipated occurrence. 

Trading on the news may be particularly dangerous since the market is so unpredictable at certain times. Additionally, the spreads on the impacted trading instruments may expand considerably. As liquidity decreases, you are also in danger of slippage, which means your transaction might be completed at a substantially lower price than anticipated or you may have difficulty exiting your trade. Nevertheless, news trading has some advantages as well. It allows investors to easily detect the sentiments of the investors in the marketplace. As a result, news trading, without looking at charts 24/7 and wasting your energy can help you to trade in the Forex market and get benefits.