Forex trading strategies have become an interest for many online traders today. Considering that Forex is a very popular way of trading today, both short-term as well as long-term traders are interested in finding a strategy that would bring them good profits on the ever fluctuating prices of the different currencies in the market. But for making significant profits in the field of Forex it is necessary to use successful Forex trading strategies and have to be applied with discipline in the course of trading. There is a wide range of popular Forex trading strategies both for short and long term traders and here are some of the most important ones for the short term traders.
Day trading is just one of many Forex trading strategies and it refers to buying and selling currencies within a specified time period of a single day which corresponds to a business day in the time zone of the trader. All the positions taken in the day are closed by the trader at the end of the Forex day chosen. The objective of this trading strategy is to perform repeated buying and selling of currency pairs with which the trader hopes that there will be small profits. Many small profits in single days can add up to a significant profit amount and that is the primary objective of a day trader.
The best thing about the day trading in Forex is that the trader does not have to worry about the open positions after the day and all are opened and closed within a day leaving no worries overnight. But the traders with limited experience in Forex may find the day trading hectic and they may also catch some common trading pitfalls like overtrading. The most required thing for an efficient day trader is his ability to enter and exit positions rapidly for a profit and it is preferred to have a plan in advance.
Scalping – One of the most popular Forex trading strategies
Scalping is one of the most popular day Forex trading strategies and it involves taking profits on small price changes, which is considered soon after the trade is entered and becomes profitable. It involves traders to follow a strict trading strategy because one large loss can eliminate many small gains which trader has gained with big efforts. Having the right tools like live feeds, direct access broker and others is good for this strategy to become successful.
Trading on News releases
Some key fundamental factors have strong influence on the price of the currencies and therefore traders take advantages of the news releases on them to make money. The major News releases may be related to GDP, Retail Sales, Economic releases, interest rates, political and geo-political news etc. This is also one of the most popular Forex trading strategies and a good percentage of the Forex traders make use of this strategy to build up their capital.