Strategy of Forex Trading

Strategy of Forex Trading

Forex trading is a business activity by selling and buying foreign currency in order to get some profits. The profits are gotten from the difference of the buying price with the selling price of the foreign currency. If you want to try this kind of trading, here are some strategies which may help you.

Sideways Trading

Sideways is the situation where the price is moving stable and tend to flat. This kind of movement is often happened, but not many traders take a chance of it because it is considered less potential. In fact, if the traders know the strategy of forex trading in sideways market, profits will be easily gotten. This kind of strategy uses resistance and support levels which is the upper and lower limit of the price within the range.

The resistance supports can be determined from many things, from manual way such as using Pivot Point method or Fibonacci tool. The basic principle is, when the price strikes a tested support, it will bounce up. As the price approaches the tested resistance, the first anticipated possibility of such a move is the price bouncing down after failing to break the resistance line.

Breakout Trendline

Vice versa with sideways trading, this kind of forex trading strategy is effective when the market is trending. Trendline is basically a vertical line which acts as support when the price is up and resistance when the trend price is decreasing. Breakout happens when the price suddenly penetrates the trendline and changes direction. If the trendline line is strongly tested, then this breakout signal can be the beginning of a reversal or price reversal.

Carry Trade

Categorized as the long term strategy which aims to get some profits from positive swaps, Carry Trade is a favorite strategy of big player in forex market. The key of success of this strategy is mostly located in the choosing of pair trading. That thing happens because the pair with 2 currencies which interest rates differ considerably will provide more profits. Besides, the fundamental analysis is also the the success foundation of Carry Trade. It is because it is important for the traders to understand and follow the update of central bank interest policy. Tricks to Find Best Online Forex Trading Broker for Better Forex Profit

Carry trade strategy is really vulnerable to the changes in central bank decisions, especially if the government likes to do intervention. So that make sure you are careful if you want to use this strategy of trading forex.



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