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Top 5 Forex Trading Strategies for 2018

03 November 2017, 17:22 CET

The key to smart trading is embracing a set of smart strategies that address the conditions of the market. In truth, being able to differentiate between profitable and unprofitable tactics, as well as applying a certain strategy to the market requires talent and a thorough comprehension of economics.

Evidently, when it comes to adopting one strategy or another, your creativity will be tested. Still, at the same time, there are a range of safe plans of actions that could maximize your efficiency.

That being said, there's no reason why you shouldn't give them a go, is there?

Trend Trading Strategy

A trend trading strategy implies pinpointing pairs that are trending up or down. In this way, the trader reckons which direction should work best. Using a trend indicator such as the RSI (Relative Strength Index) might help, in this respect. For instance, when the RSI surpasses 70 or goes lower than 30, this could set for price cancellations.

An appropriate plan for this strategy is establishing a stop and limit. Learning this trading strategy is quintessential for every trader, being one of the most profitable ones.

Candlestick Trading Strategy

Candlesticks account for the price movement/action over a fixed timeframe. These formations are useful tools that identify viable options for entries and exist. That's primarily why many traders reckon this strategy as being a favorite. They work excellently in times of volatility, while preserving their reliability in less volatile times, especially when used in combination with other strategies.

Scalping Trading Strategy

We find this strategy being fit for notice traders, in particular, since it implies low risks. Even so, insightful traders can fully take advantage of this tactic and optimize their profits, as well.

Basically, it is a trading strategy focusing in taking profits on slightly insignificant price changes immediately after a trade has become profitable. Scalping accomplishes great results by growing the number of winners and diminishing the size of the wins.

Support and Resistance Trading Strategy

Essentially, Forex traders should be able to diagnose support and resistance levels on the charts, before you open demo trading account. To that end, support and resistance account as barriers, being easily identifiable on charts. Some say that trading Forex using this strategy is one of the most lucrative ways of anticipating future price movements.

This strategy highlights the situation of the market, as well as the situations in which one should avoid entering a trade or another.

Fibonacci Trading Strategy

Take note that mastering this trading strategy takes practice; meaning that it's not the best approach if you're just starting out. That being said, the concept behind this option is the following: Fibonacci retracements are conveyed as being part of a trend trading strategy. Traders analyze a retracement in link to a trend, and aim at making low risk entries, by utilizing Fibonacci levels. In plain English, this strategy is widely used to forecast areas of support and resistance.

In summary, testing one of the enumerated strategies is the safest way to get acquainted with trading, and become better at it with each move you make!

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