Learn Trading Strategies

Before coming up with a plan a trader must learn about the various strategies that they can sue to trade forex. Coming up with the right forex trading strategy can increase your chances of becoming more successful in forex.

For traders that want to learn about strategies there are 50 strategies listed in the strategies section of this trading strategy. This strategy section also displays traders how combine these strategies to create a system. The trading is a set of rules which will be used by the traders to generate trade signals. For example the trading system rules will specify how 2 or more indicators will be used together to generate a buy or a sell signal.

As a trader the strategy you select should be applied in your once you decide what type of trader you're and what type of method you will be using to analyze the fx market moves.

For example you may decide you want to be a scalper you'll use your scalping strategy and only open trades for a couple of minutes. If you're a trend trader you will use your trading strategy after you have determined the trend of the market. If the trend is upward you'll use your strategy to open a buy trade trades.

If you're a day trade you'll use your strategy to open trades that will only be opened for a couple of hours. Your trades should all be closed during the day & you'll not hold your trades overnight. As for the trading method which may be that of trend following you'll first draw trend lines on the currency chart to determine the overall market trend and after that you will then apply your trading strategy to open trades.

In analysis there are various techniques used to trade currencies which a trader might use to ascertain which of these techniques of trading they will be using when trading the market. After choose in their method traders will then apply their trading strategy to open currency trades.

Types of Methods

There are 2 general techniques of trading the currency market, these are:

1.Trend Trading

2.Range Trading

Trend Trading

In this method a trader will first determine the overall market trend before applying their trading strategy to open trades.

To determine the trend - this can either be an upward trend or a downwards trend.

A trader may use trendlines or MAs to determine the overall market trend. After determining the market trend then the trader can use their strategy to open trades.

For example a trader may determine that the price trend is upwards by using moving averages. The trader may then use a trading indicator such as Bollingers and open trade positions once the price retraces to the lower Bollinger band because the lower band will act as the support level of price. Therefore the strategy that the trader will be using is the strategy of resistance and support levels and the trader will be using Bollinger band to determine these points & open & close trade positions based on these points.

Range Trading

Range trading is a technique of trading currencies that move within a particular band of prices and only oscillates between these 2 points without moving much outside these 2 points.

A trader will then use the trading strategy of support and resistance to determine which levels to open buy or sell trade positions. The trader will draw a support line and a resistance line. The support level will be used to open buy trades and the resistance zone will be used to open sell trade positions.

The most popular method between these 2 is the trend trading method. Traders should always try to trade with the trend method as this method is the most reliable technique/method when it comes to trading currencies. Even though sometimes the market will be trending and at other times the market will be moving in a range when the market is consolidating traders should try to trade the currency market only when there is a trend. After determining the trend traders will then use their strategy to determine when to open buy or sell trade positions that are in direction of the overall market trend.

Once you've decided what type of trader you're: scalper, day trader or swing trader you should then come up with the following:

1.Trading Method

2.Strategy

After coming up with this two you will then combine these 2 & use these to determine when to buy or close trade positions.

You can then practice trading on the demo account so as to determine the profitability of your trading technique & strategy. You will then use the results to improve the profitability of your method and strategy & once you've gained experience to trade with these 2 you as a trader can then open an account and begin trading the live market.

Study More Lessons and Tutorials & Topics:

Trade Forex Trading

Learn Trading Strategies

Types of Methods