Are you ready to join the world of forex trading and want to reap maximum gains? Things can seem incredibly difficult, but you shouldn’t be worried. With a good beginner-friendly strategy, you can trade a wide range of forex pairs and make a killing.
Finding a suitable strategy can be overwhelming for a beginner like yourself, especially since numerous options are available. But beware: not all of the strategies you’ll come across are ideal for beginners. Some are exclusively for pros with extensive experience and know-how. As a newbie, you should avoid them and stick to beginner-friendly options like:
1. Trend Following Strategy
As the name suggests, trend following involves jumping on an existing trend and riding it till things start slowing down. It’s incredibly popular today, as it allows forex traders to go with the flow rather than spend time tackling the complex task of analyzing the markets and predicting market fluctuations. If you want to avoid decision fatigue and the downsides of trading against momentum, go with this strategy.
To take full advantage of trend following, you must take several steps. Start with learning everything you can about this strategy from the best online trading course for beginners. Then, use factors like price action and moving averages to identify the best trend to follow. For maximum gains, join every trend after a pullback to a previous support or resistance level.
2. Breakout Strategy
While using a breakout strategy, you should keep an eye on the prices of your favorite currency pairs and open positions as soon as they move past a defined range. That means trying to capitalize as soon as prices break above or below specific resistance or support levels, respectively. Breakouts often indicate the beginning of a new wave or trend that trades can ride for a while.
Relying on a breakout strategy can be a wise move since it allows you to catch the biggest trends and moves early. It also works seamlessly in all popular markets, including forex. Not to forget, with this strategy, you don’t need to keep an eye on every market change; you simply wait for a breakout, open positions, and ride the wave as momentum builds.
3. Range Trading Strategy
The main idea behind range trading is buying at support and selling at resistance when trading forex pairs. And with some of the best platforms in Australia today, it requires you to have a specific range in mind, then buy when prices are near the lowest point, and sell when they approach the highest.
Range trading can be quite profitable when, rather than experiencing big swings, forex prices bounce between two distinct points. And since a predetermined range is involved, managing risk exposure and maximizing potential returns with stop-loss and take-profit orders becomes easier. Additionally, it is simple to learn and master.
Choose the Best Strategy for You Today
You are now familiar with the top 3 forex trading strategies for beginners. The question is which one is the best fit for you? While taking your pick, consider crucial factors like your risk tolerance, time commitment, and preferred trading style. Also, before settling for a specific option, analyze and factor in current market conditions. Whichever strategy you pick, minimize losses and maximize potential profits with risk management tools like stop-loss and take-profit orders.