Any forex trading expert will tell you that the difference between success and failure in forex trading is the forex trading strategies that you use. Forex trading is a high risk kind of an investment whose potential to instant riches is equally high. Most people get burned when they get in to forex simply due to greed and poor strategizing. However, there are several simple forex trading strategies which, if well applied, could lead to massive success in very little time.
What To Look Out For In A Good Forex Trading Strategy
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Good to note here is that the strategy that you choose when approaching forex trading should meet some minimum criteria. To start with, it should teach you something
useful. It should also offer you a high probability market edge. This edge should be proven, over time, to work. The strategy should also be adaptable to the changing time frames and market conditions. Finally, the strategy that you go for should be able to teach you how to do things for yourself. In other words, it should teach you how to read market signals so that you can know when to buy, when to sell, and when to stay put.
Some Simple Forex Trading Strategies That Work
Below are some simple strategies in forex trading that can be used by anyone quickly. These are strategies that have been proven to work. They are also easy to learn and implement. You can also use them for long term profits. Unlike common belief where people think that the more complex your forex strategy is, the more likely you are to profit, these strategies are not complicated at all, with a need to break very few elements in order to profit. Keeping it simple is always the key to winning with forex.
Strategy 1: Long Term Breakout Trading
One of the most basic forex fact is that most major trends start from new market lows or highs. All one needs to do is to buy breakouts on the chart to new highs and then sell these at new lows. It is one of the most effective and simplest trading strategies in forex.
Unfortunately, most traders are unable to use this strategy to their advantage. They think that they have missed out on some part of the move and thus wait for the pullback. In strong moves though, this never happens. They are, therefore, left watching the move as it heaps loads of cash while they are left outside as spectators.
The secret to this strategy is to time your entries with a couple of momentum indicators while focusing on long term breakouts that are valid. Simply use levels which the market considers important (and these occur a number of times a year leading to huge moves and profits) and you will make lots of cash.
Strategy 2: The 4-week Rule
Richard Donchian, one of the forex trading legends, devised this strategy. It is one of the simplest strategies in forex trading out there, which also happens to be among the most profitable. This system, which is totally mechanical, ensures that you get in on every major forex trend through a single simple rule: maintain a position in the market always and ensure that you buy a new 4-week calendar high and also sell a new 4-week calendar low.
Strategy 3: Forex swing trading
Unlike the above two forex trading strategies, this trading overbought oversold strategy is a short term strategy. In this strategy, you use trend lines to take advantage of overbought oversold scenarios that occur in the major trends. This pushes prices far up or far down and this occurs mainly due to fear and greed. Yours is to take advantage of this and reap a quick profit in these extended levels.
Here is the secret to this strategy; simply identify resistance and support areas, then check on their volatility (use a Bollinger band for this). Then employ the power of the ultimate timing tool, the stochastic, to confirm the move. Finally, take your profit early and search for the next one. This is a strategy that can be learnt in a few days and requires minimal discipline.
All said, forex trading is all about clear thought, strategic moves, and quick action. If you want to profit fast, go for the simplest forex trading strategies that work and that have been proven over time.
If you want more proven strategies and learn more about Forex then I recommend you go see this now.
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