Trading strategies: How to become successful

forex trading strategies
forex trading strategies

If you are interested in trading, you should familiarize yourself with trading strategies beforehand. One of the steps to successful trading is to follow trading strategies. Depending on how much experience the trader or how willing he is to take risks, different strategies can be considered. Some traders want to invest money for the long term or are particularly willing to take risks or are risk-averse. Which trading strategy can be chosen is also influenced by the available capital and time commitment. If a trader has a lot of time, he can use fast trading strategies.

Day trading is a well-known trading strategy

One of the most popular trading strategies is day trading. The trader opens positions in the morning and closes them in the evening. Many traders earn good money with this strategy. However, it involves risks and costs. During the day, the trader can make trades depending on his capital. To do this, he must regularly analyze the market and bet on small price movements. Quick profits can be made if there are small fluctuations. Who has enough time to deal with the markets, can be successful via day trading money.

Positions are held for years

Another type of trading is position trading. In this, positions are held for a long time. Some hold these positions for years and can thus accept losses due to short-term fluctuations. If a trader has a lot of time and can do without the capital, this long-term trading can be a good choice. Short-term declines or market fluctuations can be confidently looked the other way. In the long term, large profits can be made, but also bitter losses. Important is the technical and fundamental analysis of the positions. Via Tradingview the markets can be kept in view.

Set on strong and weak price fluctuations

The so-called swing trading works through a good analysis of prices. If prices record a high or a low is spoken of swing high or swing low. This type of trading works similar to position trading. Here, however, is not set on a long period. It is possible to use this strategy for a few days or weeks. It is important that a trend in the course is recognized and set on it. It is possible to bet on a price when there are positive or negative fluctuations. The focus is placed on the intrinsic value. This reflects the true value and may differ from the current market value.

The development of positions is the prerequisite for entry

Another type is trend trading. This involves betting on the occurrence of trends. This strategy can be long term or medium and short term. It is important to recognize how a position will develop. Traders have a trading plan for this and determine under what conditions the entry or exit should take place. Technical or fundamental analyses are used. Market trends can be identified and used. Different forecasts are made for downward or upward trends. A market may be dominated by sellers. An upward trend indicates that there are more buyers than sellers. The price goes up.

A scalper bets on highly liquid markets

A final way of trading is scalping. This involves analyzing trading behavior. Positions are often held for only a few seconds or minutes. A scalper is a trader who follows this strategy. The scalper avoids markets that the swing trader prefers. Unpredictable changes are avoided. Scalpers want market volatility, but only if it follows certain patterns. The profit is usually small. For this reason, the scalper goes for highly liquid markets.