The essential guide to select your best forex strategy. If you learn Forex trading for the first time, it is crucial for you to learn about the best Forex strategy that you can use for trading in the Forex market. In fact, there are several possible trading strategies that you can employ for getting the most of your trading opportunities. However, how can we find the best strategy that suits our personality?
Step-by-Step Guide to Choose Forex Trading Strategy
Basically, when it comes to confirming what the most profitable and best Forex trading strategy is, there is no single accurate answer. The reason is because every trader is unique and each of them will have different type of strategy that works. Here, considering your own personality becomes an important to do. Other than that, here are some points to consider when choosing trading strategy.
Step #1: Consider about Your Effort
How much effort are you willing to put in Forex trading? Asking yourself this question will help you to find the best match for trading strategy. If you can only traders in spare time, scalping is for sure not for you because this trading strategy likely asks you to be there in front of your computer all the times make it good for screen junkie.
Step #2: Mind about the Risk
When opting for Forex trading strategy, it is also essential for you to think about how much risk that you can afford to take. Are you prepared to admit such large losses in return for possible bigger rewards? Or do you prefer for small reward with small chance of losses as well? These questions will help you on selecting the right Forex trading strategy too.
Step #3: Don’t Forget Your Personality
As mentioned before, trading strategy is about the right one that suits your personality. That is why it is critical for you to mind about your personality as well. Here, you can ask yourself question like: what kind of proficiency do you own? Do you like to go after formula-like systems better than more intuitive and creative systems? These questions will help to decide.
Step #4: Think about Access
Moreover, it is also essential for you to think of access when choosing the right Forex trading strategy. At this point, you should ask yourself some questions too such as how you will access the Forex markets. If you are working with a US regulated broker, you are likely to have particular limits for hedging and leverage. It will surely influence the strategy to take.
Step #5: Mind about Time
When selecting a Forex trading strategy, your view of time will affect your choice on strategy too. Whether you are patient or not to hold a position on the chart will pronounce which strategy is best for you. Thus, ask yourself this question: are you a typical of patient person or one who hopes to get immediate results?
Commonly Used Strategy in Forex Trading
Now, regarding some of the considerations above, you can choose a Forex trading strategy that suits your personality. To get started, there are actually some frequently used strategies in Forex trading that is grouped based on its nature. If you are looking for high frequency trading, you can consider scalping and swing trading. If you want to observe individual data points, prefer candlestick trading.
Other than there, there is also technical strategy which includes trend trading, range trading, breakout trading, divergence trading and reversals. If you prefer fundamentals strategies, you can consider carry trading and news trading. Those are some normally used strategy in Forex trading that you can take into account. Consider learning these in details when you learn Forex.