Sunday, February 26, 2012

Most Popular Forex Trading Strategies

Forex trading strategies are key to successful trading. An understanding of these Forex trading strategies can make a significant difference to what you stand to gain from your stint in the Forex market. The following are some Forex trading strategies accessible to investors:
Leverage. While leverage enables online Forex traders to trade a higher amount than they have in their account, it also exposes them to higher risks. However, you can make the most of leverage (which is sometimes as high as 100 times the amount you have in your deposit account), while protecting yourself from huge losses by using a strategy. This strategy involves making use of only as much leverage as is appropriate for the experience you have in trading.
Stop loss order. This is another universally used Forex trading strategy that enables investors to cap their losses. This strategy helps generate a pre-specified price level beyond which investors would neither let their position remain open nor place a new trade.
Simple Moving Average (SMA). The ability to read prior data from charts is highly critical to Forex trading. The SMA is usually automatically generated by a Forex trading platform. The moment the price of a currency moves above the SMA, it represents a time to buy, and when the price dips below the SMA, it is the time to sell.
Support and Resistance. These are the levels at which the market price of a currency tends to reach repeatedly, but fails to move above/below it. These levels can be identified by studying the past data of a currency pair.

Although none of the Forex trading strategies can guarantee 100% results, most of the times investors seem to benefit from them. You can adopt any of the Forex trading strategies depending on your requirements. Easy-Forex® offers Trading Tools that
help you improve your success potential.

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