6 good trading strategies to benefit from Forex currency day trading
6 good trading strategies to benefit from Forex currency day trading which is one of the best investment option
What is forex currency trading ? Forex currency trading is online trading of purchasing and selling forex currency pairs. The forex currency pairs can be USD/EUR; EUR/USD etc., the quotation EUR/USD 1.25 refers that one Euro is exchanged (Buy or sell) for 1.25 US Dollars. There are many forex trading brokers who offer trading platforms like iforex.com, forextrading.com, easy-forex.com etc.,
Below are the 6 good trading strategies to benefit from forex day trading which is one of the best investment option in my opinion
- Going short after rapid upward movement: If you observe in case there are any rapid upward movement, the price may not stay up for longer time. Majority of the cases the price would fall. So your strategy should be going short (Sell the forex currency pair) during the rapid upward movement. Once the price gets settled, you can buy back the forex currency and book profits. Out of the 10 tradings I have done using this strategy, I have gained for 7 tradings
- Profit just after break-even: Adopt a strategy where in you book profit immediately after the break-even. Do not wait for larger profits. Though the profits are smaller in number, the larger number of such trades would provide handsome profit for the day.
- Choose right time for trading: Just observe the forex market during Asian time for Eur/USD pair, there is very less trading. However if you observe the same during London/US time, it would be trading with high volatility (Up & Downs). Choose such trading time as one of the strategy to benefit within minutes instead of spending hours
- Day sentiments: Just watch the global economy and local currency sentiments. If Euro is weakening for the day, you can either sell Euro or buy USD (Euro is weakening and Dollar is strengthening)
- Adopt strict Stop-Loss strategy: Fix up your stop loss limit based on your risk tolerance. Once your stop loss is hit, do not make fresh investments immediately to cover up the losses. You may end up in making huge losses for the day. During my learning stage, I lost UD 20 and to cover this up I invested USD 80 and I lost all of them in a single day.
- Learning curve: Try all above strategies for 2-3 months continuously and write the lessons learnt by you in this. You need to modify them in case the assumptions made by you are wrong.
Conclusion: Pick up a note book and start the forex day trading “on paper” before you make any investment. Once you are familiar in 2-3 months and you know the risk tolerance level, you can start direct investment in forex trading and make profits. This is one of the best and good investment option one can look for.
Readers, are you doing Forex day trading? If so, are you gaining from this or losing the money? Please give your comments
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