A trading strategy helps the retail trader to find the profitable trade deals. The professional traders uses different kinds of trading methods but all of them have two common factors, fundamental and technical analysis. Unless you evaluate the technical and the fundamental data, it will be really hard to make good decision at trading. Now let’s check the top 8 trading strategies used by professional traders.
- Price Action Trading
Historical prices study involves price action trading to formulate the strategies of technical transactions. Such form of trading is a stand-alone technique, or it can use as an indicator. Seldom used analysis is fundamental analysis, and as a substantiating factor, it is not unheard-of economic events.
A trader can utilize the price action signals at varying periods, including short-term, medium, and long. Many traders value this type of strategy because of its ability to use multiple time frames.
- Rang Trading Strategy
Identifying the resistance and support points includes a range transaction, whereby a trader will place trades around these critical levels. In the market, this strategy works significantly without much volatility, and it has no discernible trend. Therefore, this strategy’s primary tool is technical analysis.
There is no set of per trade length in a range-bound strategy, and the traders can work at any time. This method’s integral part is managing risk as breakouts can occur anytime. Being a range trader, always trade with the top brokers like Saxo as it will help you to avoid technical problems.
- Trend Trading Strategy
A simple Forex strategy is trend trading which many traders use at their experience levels. This trade-off exploits the directional momentum of a market and attempts to create a positive return.
Usually, the medium to long-term time horizon takes place in trend transactions as, within this length, the trend themselves fluctuate. However, in movement dealing with price action, the trader can adopt the multiple time frame analysis.
- Position Trading
Position trading focused primarily on the fundamental factors, and it’s a long-term strategy. This strategy doesn’t consider the minor or smaller market fluctuations as the broader market picture not get affected by this. From Forex to stocks in all markets, this strategy can employ.
Position trade reserved long-term outlook (such as month or years) for the extremely persevering trader.
- Day Trading
This strategy aimed to deal with the financial widgets within the same transaction day. That is, before closing the market, all the positions are closed. However, throughout the day, it can be multiple or single trades.
The trade open and closed within the working day; thus, its length varies within the short-term range (from hours to minute).
- Forex Scalping
A common term in Forex scalping and it’s used to describe the small profits taking process frequently. Though out day, multiple positions opening and closing take place within this strategy. Algorithmically or manually, this can be done, and it used predefined guidelines regarding the entry and exit positions.
Short-term trade entails scalping with minimal return, and it also operates on less significant time frame charts (30 min – 1 min).
- Swing Trading
A speculative strategy is swing trading, whereby the traders took the trending markets, and the range bound advantage. Accordingly, a trader can enter a short or long position by choosing tops or bottoms.
Medium-term positions are considered in swing trades, and they can hold between a few days to a few hours. Longer-term also characterize here.
- Carry Trade
Once currency borrowing at a lower rate includes Carry trades, the trader can invest in another currency at a high yielding rate. Ultimately this results in transactions positive carry. Primarily this strategy is used in the Forex market.
Therefore, medium to long-term deal length supports this, and the time range from the week, months, or years.
With actual trading examples, this article describes 8 types of Forex strategies. Depending on personal qualities, each trading method appeals to various traders. In the end, aligning the commercial personality with the corresponding strategy will enable the traders to go on the proper path.