Online forex trading has grown by leaps and bounds over the last several years. As more and more investors discover the tremendous benefits of conducting trades using the internet, online forex trading platforms have gained in popularity. But you will only do well in online forex trading if you have a sound strategy that you are able to execute. Trial and error will get you so far and no further. All strategies will fall under two broad categories – either hedging or speculation. I will share with you a few strategies that you can use to become a more successful online forex trader for 2017.
Trading currency pairs is a basic strategy that every forex trader should grasp. This is a hedging strategy that mitigates potential losses due to fluctuations in exchange rates. Once you have chosen your currency pairs, you should be ready to trade. Bear in mind that the strategies for online forex trading are pretty much the same as general strategies. However, trading is basically unlimited thanks to the internet.
There are four basic strategies that any forex trader can successfully utilize. The first strategy is day trading. This strategy is where trades are exited before the end of the trading day. What this does is that it minimizes the chance of losses due to overnight changes in exchange rates. The next strategy is scalping. In this strategy, trades are very short-lived and usually are exited after a few minutes or a few hours. The aim is to use tick charts to help beat the bid/offer spread. Another strategy is swing trading which is when trades are maintained for several days with the aim being to capitalize on short term price patterns. Finally, positional trading focuses on the long term where traders look to benefit by following long term trends in the market. Major price shifts often present opportunity for profit.