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Strategies For A Successful Forex Trading In 2022

Publish date: Thu, 12 May 2022, 02:41 AM
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Trading forex is becoming more popular than it was a few years ago. Behind the popularity of forex trading is its global market with people trading around the world. The major currency pairs that are traded include the EUR/USD, USD/JPY, GBP/USD, and USD/CHF.

Thanks to the technological evolution and use of mobile devices, forex trading is accessible for everyone. But it requires you get out of your comfort zone and work to achieve more wins while eliminating losing trades. Becoming a successful trader requires that you develop a strategy that is risk tolerance but which helps you win more. Research shows that scalping strategy, day trading and trend trading are the strategies used by most successful traders. Lately, other successful traders use a range of trading strategies to execute their trades. 

So what is easy forex? It is a platform that allows traders to trade forex. Here, you need to use three elements to help you choose a strategy to use to trade forex successfully. They include considering the time frame, looking at the number of trading opportunities and determining the right trade size. Read on to learn more about the strategies on easy-forex to trade currencies. 

Scalping Strategy

It is the most popular strategy traders use to trade forex. The strategy focuses on smaller market movements. Therefore, the trader may open many trades that bring in small returns per trade. However, the aggregate returns from these small trades become significant in the long run. The scalpers place a large number of trades for a few hours, days or weeks. It is a good strategy to deploy in highly volatile markets. Investors look at the market with huge price fluctuations and capitalize on price movements.

Day Trading Strategy

It is where one chooses to trade in currencies in one day. The idea is to open and close the trades in a day. But when you use this strategy, you must ensure that no positions stay open at night. It helps to minimize risks when you are asleep. Day traders may stay in a trade for the day. However, they must monitor and manage the opened trades. They use a 1 hour or 30 minutes time frame to generate trading ideas.

Also, day traders base their trading actions on breaking news. They watch scheduled events, GDP, interest rates, economic statistics, elections and interest rates to make decisions. The trader sets a daily risk limit to protect their capital and account. Also, the trader must find the support and resistance levels on the charts before placing the trades.

If the prices move upward, they place a stop loss a few pips above a previous swing high. On the contrary, when prices are moving downwards, the take profit is placed at the support level.

Position Trading Strategy

It is one of the long-term strategies based on fundamental factors. The strategy does not consider minor market fluctuations.

Therefore, before a trader takes a position, they monitor political development, central bank policies, and a host of other fundamental factors that help in identifying an appropriate trend. The trader opens a few trades and may target profits after a couple of hundreds of pipes in each trade. But this strategy requires some patience and may take years, months or weeks to close.

Range Trading Strategy

The trader looks for trading instruments consolidating in a certain range. They look for  consistent resistance and support areas. They observe the price's inability to go past the resistance area and how it bounces off the support area. They use the Direction index (ADX) and moving averages to establish a trend. If the ADX is lower, the trend is weaker, but if it is high, it is strong, and thus the trader must identify the range it is consolidating within.

When the price hits the resistance area, the trader sells the currency. On the contrary, they sell when the price hits the support line.

Ideally, the trader identifies a trading opportunity in a trend and assumes that the trend will continue moving in the same direction until it reaches the support or resistance level. It could be an uptrend when prices are moving up or a downtrend when prices are falling.

After watching the moving average specifically the 200 DMA, and the MA crossovers .traders take an appropriate action.

Final Thoughts

Thus, Range strategy, position strategy, scalping and day trading are some of the strategies traders use to trade forex. However, the strategies do not produce the same results for all traders. There are other factors, such as the timing, that determine the success of each strategy.



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