It is of absolute importance to understand that planning is essential for success in these times, and Forex trading is no difference to this rule. If you want to be successful in Forex trading, you must create an appropriate strategic plan. These plans, also known as Forex strategies, will allow us to create one or more rating lists that help in finding a forex broker will serve as a reference in the future when making decisions.

Successful Forex traders must know and understand the pros and cons of managing various trading strategies. You should never blindly trust a strategy and follow it to the letter. For example, some strategies promise great benefits in the shortest possible time. Such promises should be alert, and strategies like these should not be relied upon.

Before delving into the strategies, you should know, what are the most notable advantages when implementing? Then, among them we can find:

  • A performance pattern is defined as the strategies which will help to follow a performance pattern to continue moving progressively, in the world of Forex.
  • Know the mistakes and successes. The previously elaborated negotiation systems allow knowing the successes and the mistakes, and in this way, enable them to elaborate on the best personal strategy in the future.
  • Know the market. It allows you to know in advance the movements that occur in the market, the possible changes in trend that can be generated and also, how the prices are at all times.

Without more details to add in this article, you will find a summary of the main strategies that have generated the best results in practice, which are described below:

  1. Forex scalping strategy:

The scalping strategy is based on making a large amount of small profits in the shortest possible time. It is one of the most complicated techniques to perform, but also one of the most profitable.

To apply this strategy, you must open orders that have a maximum duration of 5 minutes. As you can see, the lifetime of each position is very short which does not generate many opportunities to accumulate profits, since you do not have much time you must make each of them worthwhile; you must open all the orders you can in the less time possible. While in traditional strategies, it is usual to operate with 2 or 3 lots, in scalping, you should use 5 to 50 lots.

Whenever you can, try to set a stop loss close to the order’s opening price. However, due to the rapid nature of the strategy, it is often not possible. This is one of the advanced techniques to trade Forex preferred by the most experienced.

Scalping has detractors and defenders. However, it is undeniable that this strategy can provide profits in a short time; it is the only one accessible to the retail trader. Remember that to carry out your scalping strategy, make sure to always operate with a reliable and regulated broker.

 

2, Positional trading strategy:

Positional trading can be considered, one of the most advanced and most profitable strategies, it has reported the highest profits to people who use it. This method generates a great variety of advantages, such as requiring little attention and generating good results. Unfortunately, its downside is that it requires an in-depth analysis and knowledge of the market and a lot of investments of time to accumulate profits.

Applying this strategy is quite simple:

  • Find a currency pair that has good volatility in the long-term, but few fluctuations in the short term.
  • Analyze the economic factors that can affect currency prices.
  • Calculate an adequate volume for the transaction.
  • Find a balance point between the profit from the operation and the swaps.
  • Open the operation and wait.

Positional trading, unlike many other trading strategies, runs at the highest time in the market. It can be said that this method is the opposite of scalping since operators must maintain their positions for several weeks or months (and in some cases years).

  1. Day Trading:

It can be interpreted as currency exchange, that, which finalizes at the end of the day. So, it avoids that the transaction is effected by the night movements of the market. These exchanges last a few hours, and prices are established in a few minutes. It is a short-term strategy that seeks to take advantage of the volatility of the day.

This strategy well-used can be adapted to generate income in almost all exchanges, as long as you do not forget to close the positions at the end of the day.

  1. Swing Trading:

In the case of Swing Trading, it can be defined as currency exchange, where positions are held for several days to take advantage of the price guidelines that appear in the short term. It is a medium-term strategy that maintains investments for days or weeks to catch the best movement that can be considered as a sure profit.

In conclusion and after analyzing and evaluating the strategies to be used, these aspects must be taken into consideration. Always remember that no strategy is 100% infallible; in fact, it can be said that a strategy with a 70% success rate is completely successful. Before examining a strategy with real money, it is notably essential to evaluate it in a demo account and carry out complete backtesting. Apply the trading strategy that best suits the style and personality of the trader.