As a beginner in trading, you will need to be careful in choosing which trading strategies you will use at the start of your trading journey. Recent data shows that about 80% of traders lose money in the long run, and the wrong choice of trading strategy is the reason most traders lose their money, which is often unrealistic. When forex trading, you should have a clear idea of some strategies that can help you trade successfully.
As a new trader, you can keep the ball in your court by choosing the best beginner trading strategy. The following article describes some simple and effective trading strategies for beginners.
Choose the right trading strategies
Technical analysis strategy
In the field of trading, technical analysis is a prediction of price changes in the future based on the analysis of price changes in the past. Many new traders follow strategies based on the results of this analysis. Technical analysis includes studying graphical figures and identifying patterns.
Mathematical and statistical calculations are often used to convert the patterns and numbers formed on the chart to determine which patterns can be opened for trading and to give advice to the trader.
As a global market, Forex is influenced by financial events. Examining economic events and their potential impact on currency pairs helps traders predict short-term (intraday or multi-day) market movements or breakouts. It is essential to remember that, like any other global trading market, Forex can be influenced by unforeseen and one-off events, such as natural disasters or political events.
News traders use economic calendars and indices, such as the Consumer Confidence Index (CCI), to predict when and in what direction a change will occur.
When you trade candle charts, sometimes you will notice a gap that occurs between two candles. A spread is an empty space on a chart that appears between two candles, and trading these spreads is called Gap Trading.
The gap will appear when the price of an asset rises or falls sharply with nothing in between. This indicates that the market opened at a different price than its previous close. Typically this occurs between the close of one day and the opening of the next day.
A pair trading strategy is based on the historical correlation of two stocks. The values of a trade pair should have a high positive correlation, which is the main driver of the strategy’s profits.
A pair trading strategy is best implemented when a trader identifies a correlation gap. Depending on the historical notion that the two stocks will maintain a specific correlation, pair trading can be implemented when that correlation fails.
Trendline trading moves in a general direction in which the value of a financial market or the price of an asset moves. A trendline is an identifiable straight line that connects a sequence of prices and then continues to show support or resistance, depending on the direction of the trend.
Today trendlines have become very popular for identifying support or resistance levels as a form of technical analysis. Hence, it can be a profitable strategy for beginners to trade effectively.
Newbies to the world of Forex can benefit from the best simple trading strategies that work in Forex because these strategies are relatively easy to follow. They have the reputation of being profitable in the long term, putting all the odds in their favor. Therefore, it would be better to try different trading strategies and then choose the one that is psychologically the best fit. Therefore, by following the strategies above, you can start trading forex online efficiently with more benefits in return.