When it comes to Forex Trading, it is important to know all about eliminating the losing trades by cutting losses quickly and achieving more winning ones. This is proven to be a fact, thanks to successful trading strategies in the past.
It happens very often that traders only rely on trading strategies once they feel it is absolutely necessary or they use untested strategies that does not deliver results. When this is your attitude about trading, you are setting yourself up for possible failure.
We know it’s hard finding the perfect strategy, so the only solution is to try out the leading strategies and see if they actually work for you as a trader.
With that said, what strategy is the best Forex trading strategy? Below we will discuss a few strategies:
This is a long-term trading strategy where you hold your trades for weeks or even months. The timeframes you’ll trade on are usually the Daily or Weekly. With position trading you might use technical analysis to better time your entries.
When you swing trade, it means that you are trading on a medium-term strategy and you only hold trades for days or a few weeks. The timeframes that you will trade on are usually 1-hour or 4-hour. A swing trader’s only concern is to capture “a single move”.
If you are a day trader, it means you are trading on a short-term strategy called “day trading”. You will only hold your trade for a few minutes or hours. This is similar than swing trading, but with a different timeframe. The timeframes you will trade on are usually 5-min to 15-min.
Scalping is a very short-term strategy; with this strategy you will hold trades for only a few minutes or seconds. If this is your preferred trading strategy, your only concern should be with what the market is doing right now and how you can use it to your advantage. The main tool you’ll use to trade, as a scalper, is order flow; which allows you to quickly buy and sell in the market.
It is only once you understand the different trading strategies that an informed decision can be made as to which will suit your trading style best. Happy trading!