People constantly chase for different ways to make more money. It is not a secret that people got tired of “9-5” jobs. We do not want to say that making a fortune is possible immediately after you graduate. You need to gain certain experience by working on certain working places. However, the salary that people get usually can’t cover all of our costs. Sooner or later, we all make some tough decisions and prepare ourselves for certain risks.
For example, many people would start a private business. Thanks to social media and the Internet, reaching our target audience is easier than ever before. Yet, this doesn’t mean that everyone who starts a business will become a millionaire. The opportunity we mentioned is available to everyone. In other words, competition is tough.
There is another thing that becomes more and more attractive to people. It is not a secret that the Forex market is hugely liquid. The number of participants is growing daily and the value of the market slowly grows. Professional FX traders had to develop different trading strategies that would split them from the masses.
First Things to Do as a Beginner
Many beginners consider Forex trading as “easy money”. However, this approach is completely wrong and ineffective. You need to be a patient and hardworking trader to reach success.
Well, the first steps usually are the toughest ones. Because of that, you need to start participating in this industry well-prepared. IN other words, you can’t deny the importance of knowledge improvement. The beginners should primarily focus on the improvement of theoretical knowledge and skills. Start by reading different books related to this subject. Despite that, visit blogs similar to this one that will give you more info. Finally, try to network with other traders. Some of them might accept to be your mentor.
After you get familiar with the basics of Forex trading, continue to the next move. In this article, you will find out the best forex trading strategies for beginners. With proper knowledge, each one can bring you profit. However, it is crucial to pick one that will meet your requirements and expectations.
Let’s find them out together!
Follow the Trend
No, we are not talking here about following fashion trends and buying quality clothes. Indeed, this type of “following” is much easier compared to following trends in the Forex trading industry. However, the trends in this industry are changing fasts. You need to follow them with a clear mind and the ability to understand them.
Let’s explain everything we said a bit better. First of all, when you establish yourself on the market, open the positions in the same direction where the trend goes. It is important to know that there are three types of trends out there – short, medium, and long term. Well, after deciding on one type of trend, you need to determine the trend following strategy. In that case, you have two options – long term and shorter time strategy.
You probably see know why knowledge is so important. You probably do not know exactly how these strategies look in reality. It would primarily be good to understand the key differences between them. After you do, you will easily decide on one type of chart. However, whichever chart you pick, your strategy will follow the trends in every moment.
Once again we use the word “trend” in our subheading. However, we are here talking about a different strategy. We will give ourselves the right to say this might be one of the simplest you can choose. You simply need to draw a straight line and connect two different points on the chart.
Let’s imagine that trend is upward. Well, in that case, the line should below connect two or more low points. However, it might happen that trend is down. If that’s the case, then the line should be drawn over the chart. Its purpose is to connect more than 2 high points.
You need to know that sometimes a trend line is going to be broken. This only means that certain factors will change the mainstream. It is important to realize when something like this happens on the market.
Thanks to moving averages, the traders will get valuable signals to sell or buy. These singles you always need to put into consideration. Thanks to the insights that you get, you will easily determine the state of the trend you follow.
Applying this strategy to the trading process is possible in many ways. However, we are here to talk about the simplest ones. Use two different averages and place them in the same chart. After you do that, you only need to wait for the crossing of the averages.
Let’s use an example to make things even clearer. On one side you have an upward trend where the prices were in a correction. On the other hand, you have a faster-moving average of 10 days at the same time. If the moving average is slower for the 20 days (i.e.), then this should be a good sign to buy.
Well, this sort of strategy gives you a clear picture of oversold or overbought markets. As we previously said, moving averages verify current market trends. However, oscillators usually inform you about the perfect time to open a trade.
Forex traders work with different oscillators, but we would like to highlight the two most popular ones. Those two are the stochastic oscillator and Relative Strength Index. Both oscillators are based on a scale of 0 to 100. Let’s imagine that RSI on the current market is above 70. This means there is an effect upon purchase. On the contrary, if the RSI is below 30 or 25, this is a good insight that the market is not overbooking. When we talk stochastic oscillators, the value of overbought is 80, while the value of oversold is 20. Remember these numbers because they will be quite valuable to you in the future.
Bonus Tip: Make Things Easier with a Forex Robot
Well, the usage of Forex robots can be considered as one of the strategies as well. The entire trading process becomes automated and it allows you to make some better decisions. Still, you will find a huge number of them by basic Google research. Our recommendation is to visit bestearobots.com and find out more about the best ones. You will also discover how working with Forex robots functions.