Forex trading can be simple or complicated. At the beginning of any Forex trading, a trader is usually required to implement a Forex trading strategy. A trading strategy is simply a trading setup which includes entry and exit signals. There are numerous strategies that Forex traders can try to implement. In most cases, beginners tend to implement a few strategies as they test their success rate in the market.
Trading Forex is a tough and dynamic investment. There is no single foolproof trading techniques which will guarantee you absolute success in the market. Nonetheless, there are some advanced Forex trading strategies, if implemented well, can help you achieve satisfactory profits. In this article, we are going to look at some of these advanced strategies which can be executed by both beginners and experts.
Positional trading is a sophisticated strategy most preferred by the top earning traders. The strategy doesn’t require a lot of attention like other strategies. However, you will only succeed trading position if you have a comprehensive and long-term market analysis. Positional trading is different from the other strategies since it isn’t performed on small time frames.
It isn’t a day trading. Any trader who starts trading in positions is expected to hold a particular position for quite an extended period. The amount of time a position is held entirely depends on the trader’s overview of the market, and the amount of profit gained. The main feature of positional trading is that it ensures you break even at the end of your trade. By holding a position, you are profiting for as long as the market prices are moving in your favour.
However, to perform position trading successfully, you will need to analyze and gain an excellent overview of the current economic situation of the country of the currency you are planning to trade with.
Hedging is an effective trading strategy which is aimed at reducing risks by taking both sides of a trade at once. The easiest way of hedging is initiating a long and short position concurrently. For example, you may make up your mind that you want to go short on the USD/EUR since you have seen it at the top of a recent price range.
After initiating the short, you start thinking that the USD /EUR is looking stronger and you have a feeling that it may move upwards and it may make your previous short expensive, so you start looking for other USD pairs to advance your balancing act. Let’s say you discover that the USD/JPY is moving in the opposite direction to the USD/EUR, so to complete your hedge you decide to go short on USD/JPY. At the closure of the market, if the USD ends up breaking resistance emerge stronger than the EUR, your short EUR trade wins while the USD/JPY short lose. Either way, you gain some profit.
Scalping mostly depends on high leverage to make profits. It involves making very short term trade for a few pips. The trade can last for a few seconds or a few hours. If you do not have a clear idea about what you are doing, you may end up losing so much.