Most commonly used forex trading strategies for beginners

Strategies are extremely crucial to get the best rewards out of online forex trading. Online forex trading Strategies, depend on the duration of online forex trading - long trade or short trade. While for a long trade, a trader speculates the price of the forex will rise whereas, in a short trade, he expects the prices to plunge! Traders also develop their strategies based on technical analysis like breakout and moving average, to maximize their profits in online forex trading.

Gone are the days when forex trading was offline. Today with the internet and technology -online forex trading is a thriving reality.  Online forex trading is more convenient, faster, and more result-oriented. However, one needs to develop the correct strategies to gain the most out of online forex trading. Strategies alone cannot be of help. One needs to have the right fundamental knowledge, technical and analytical skills to ace the online forex trading as a trader.

Scalp Trade:

Scalp Trade-in online forex trading is a strategy in which, a trader is able not to hold his position for a very short period, ranging between a few seconds to a few minutes. Consequently, the profit amount earned is small and called pips. Scalp trades are cumulative which means that the traders make small profits which add up to a considerable amount by the end of the day. Scalp trade primarily depends on how well can you predict the changes in prices. However, one needs to be careful, as it is extremely vulnerable to volatility. Hence, traders use this strategy, only when they are confident about the most liquid pairs and how they would behave at the busiest trading times during a day.

Day Trades:

Day Trades are short-term trades since the position or stance is held one day at a time. This means, that the positions are held and liquidated on the very same day. Now, what is interesting is that the duration of the day varies across hours and minutes. Day traders should possess the correct skills, ability to analyze, and knowledge to earn the most out of the day’s trading. The key factor is, the traders who understand how to fall back on the incremental profits through the day for trading, can earn maximum profits!

Swing Trade:

Swing Trade, in online forex trading, holds the position for a period that is longer than a day extending to days or weeks. Swing trades are most useful when there are some major changes in the norms or rules of online forex trading. These are also subjective to the major movements or shifts in an economy, a market that is probably going to have a long-term effect. What makes it different from the other strategies is, since it is spread over a longer period of time, hence one does not need to keep tracking it constantly throughout the day. Not only does it require a trading experience but it also incorporates the expertise to predict the upcoming existing socio-political movements and their probable impact revolving around the movements in prices in a market.

Position Trade:

Position trade, in online forex trading is one in which the position is held by a trader for a fairly long duration of time – months to years. You can excel in position trade, only when you have the requisite amount of fundamental analytical and interpretational skills, to lend you support and a valid reason for the trade!  

Forex trading, especially online involves a trader developing a strategy at every stage. The strategies are different for online forex traders at different stages of their trading journey. A beginner might have a strategy that has a short-term approach with an expectation of a high return while for the experienced traders the strategies are developed as a result of continuous speculation and analysis of the trends in the rise and fall of currency prices, with a long term approach.