Forex trading is the buying and selling of currencies from around the world. It is the largest financial market globally, with the average daily turnover being around $5.3 trillion. The Forex market is open 24 hours a day, five days a week, and operates in major financial centers such as London, New York, Tokyo, and Sydney.
Forex Trading
Forex trading is the buying and selling of currencies from around the world.

ABOUT FOREX TRADING

Forex (F X)trading is an exciting and profitable market that attracts traders from all over the world. However, to succeed in Forex trading, one needs to have a good understanding of the market and the strategies to use. This article will provide unique  content on Forex trading, including what it is, how it works, and the risks and benefits involved.

WHAT IS FOREX TRADING AND FOREX MARKET?

Forex trading is the buying and selling of currencies from around the world. It is the largest financial market globally, with the average daily turnover being around $5.3 trillion. The Forex market is open 24 hours a day, five days a week, and operates in major Forex market is open 24 hours centers such as London, New York, Tokyo, and Sydney.

BASICS OF FOREX TRADING:

  • The basics of Forex trading involve predicting the direction of currency prices by analyzing economic events, news, and market data. Traders use different strategies such as technical analysis, fundamental analysis, and sentiment analysis to determine the direction of the market.
  • Forex trading involves a significant amount of risk, as the market is highly volatile and subject to sudden price movements. As such, traders are required to have a good understanding of risk management and have a strict trading plan in place to mitigate losses.
  • One of the main benefits of Forex trading is its accessibility to traders of all levels, including individual traders and institutions. The market is highly liquid, meaning traders can enter and exit positions quickly and at any time. Additionally, Forex trading offers the opportunity for high returns, with some traders making significant profits.

HOW TO BEGIN TRADING ON FOREX?

Trading Forex is similar to equity trading. Here are some steps to get yourself started on the Forex trading journey.

  1. Get knowledge about forex: While it is not complicated, forex trading is an undertaking that requires specialized knowledge and a commitment to learning.
  2. Set up a brokerage account: You will need a forex trading account at a brokerage to get started with forex trading.
  3. Develop a trading strategy: While it is not always possible to predict and time market movement, having a trading strategy will help you set broad guidelines and a road map for trading.
  4. Always be on top of your numbers: Once you begin trading, check your positions at the end of the day. Most trading software already provides a daily accounting of trades. Make sure that you do not have any pending positions to be filled and that you have sufficient cash in your account to make future trades.
  5. Cultivate emotional equilibrium: Beginner forex trading is fraught with emotional roller coasters and unanswered questions. Discipline yourself to close out your positions when necessary.

DO YOU KNOW 7 BEST TRADING STRATEGIES FOR BEGINNERS?

If you have been searching for the strategies of Forex trading then read the following points ;

What are Forex strategies?

A Forex strategy is a system of rules that help to consistently and objectively analyse market behaviour to gain insight on who is in control of the market and whether there is a high probability chance of buyers and sellers turning up again in order to take a trading opportunity.

1.50-Pips a Day Forex Strategy

One of the latest Forex trading strategies to be used is the 50-pips a day Forex strategy which leverages the early market move of certain highly liquid currency pairs. The GBPUSD and EURUSD currency pairs are some of the best currencies to trade using this particular strategy. After the 7am GMT candlestick closes, traders place two positions or two opposite pending orders. When one of them gets activated by price movements, the other position is automatically cancelled.

The profit target is set at 50 pips, and the stop-loss order is placed anywhere between 5 and 10 pips above or below the 7am GMT candlestick, after its formation. This is implemented to manage risk. After these conditions are set, it is now up to the market to do the rest. Day trading and scalping are both short-term Forex trading strategies. However, remember that shorter-term implies greater risk due to the nature of more trades taken, so it is essential to ensure effective risk management.

 

50 pips a day forex trading strategy on the metatrader 4 platform

This is a screenshot of the MetaTrader 4 trading platform provided by Admirals, showing the EURUSD H1 chart from the Zero.MT4 account:

2.Daily Chart Forex Strategy

The best Forex traders swear by daily charts over more short-term strategies. Compared to the Forex 1-hour trading strategy, or even those with lower time-frames, there is less market noise involved with a Forex daily chart strategy. Such Forex trade setups could give you over 100 pips a day due to their longer time frame, which has the potential to result in some of the best Forex trade setups and potentially some of the most successful trading strategies around.

Daily Forex strategy signals can be more reliable than lower time frames, and the potential for profit could also be greater, although there are no guarantees in trading. Traders also don’t need to be concerned about daily news and random price fluctuations. The Forex daily strategy is based on three main principles:

Locating the trend: Markets trend and consolidate, and this process repeats in cycles. The first principle of the Forex daily strategy is to find the long drawn out moves within the Forex market. One way to identify a Forex trend trading chart is by studying the price data over the last 3 months. Identifying the swing highs and lows will be the next step. By referencing this price data on the current charts, you will be able to identify the market direction.

Staying focused: This requires patience, and you will have to get rid of the urge to get into the market right away. You need to stay out and preserve your capital for a bigger opportunity which is the key to success in a daily time frame Forex strategy.

Using larger stop losses: Be aware of the large intraday swings in the market. Using larger stops, however, doesn’t mean putting large amounts of capital at risk but it does help to deal with the random volatility that can develop during the day, which is why it makes it to the list of trading strategies.

While there are plenty of trading strategy guides available for professional FX traders, the best Forex strategy for consistent profits and creating the most successful trading strategies can only be achieved through extensive practice. Let’s continue the list of trading strategies and look at another one of the best trading strategies.

3.Forex Weekly Trading Strategy

While many Forex traders prefer intra day Forex trading systems due to the market volatility providing more opportunities in narrower time frames, a Forex weekly trading strategy can provide more flexibility and stability. A weekly candlestick provides extensive market information. Weekly Forex trading strategies are based on lower position sizes and avoiding excessive risks.

For this strategy, traders can use the most commonly used price action trading patterns such as engulfing candles and hammers.

One of the most commonly used patterns in Forex trading is the hammer which looks like the image below:

hammer price action trading strategy

The opposite of the hammer is the shooting star which looks like the image below:

 

shooting star price action trading strategy

 

Conclusion:

Forex trading is a lucrative market that requires a good understanding of the market and strategies to use. While it offers high returns, traders should also be aware of the risks involved and have strict risk management and trading plans to mitigate potential losses. With the right approach and mindset, forex trading can be a profitable venture for any trader.

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