Forex Trading Strategies
When it comes to trading on the Foreign Exchange Market, there are two different strategies that can help you make a good amount of money easily. Both of these strategies involve a bit of risk, as any trading strategy does, but both can result in a good amount of profit. The first uses the concept of the simple moving average to calculate when to take a risk, while the second estimates the best time to sell by looking at support and resistance levels.
Strategy One: Using the Simple Moving Average
One definition of successful trading is maximizing your reward while minimizing the risk you take. While this may sound simple enough, it can be somewhat difficult. You want to limit your risk as much as possible, but at the same time, you want to make a good amount of money. Sometimes, the most rewarding moves are also the riskier ones. The Simple Moving Average study is one of the many decision-making models that can be used to decide if the reward is worth the risk. The study is generally based on 12 different 15-minute periods of trading.
The model is fairly simple: when the currency price rises above the simple moving average as determined by averaging the price over the 12-month period, then you buy. When the price drops below the simple moving average, then you stop and reverse, or in other words, you establish a short position and liquidate a long position. This means that you will always be in the market either with a short or a long position.
While professionals use moving averages and other factors to determine when to buy and sell, it should be noted that using the moving average strategy does have some risks. A long position, for example, may be stopped out quickly if the price drops below the simple moving average since it will automatically send a stop and reverse signal.
Strategy Two: Using the Support and Resistance Levels
The second simple trading strategy involves what is known as support and resistance levels. This strategy makes note of the fact that the market generally trades above the support level and trades below the resistance level. If the market rises above the support level or drops below the resistance level, then experts expect the market to follow through. To determine these levels, strategies analyze the market trends, including looking at where the market has had either unbroken resistance or support.
Basically, when the market level of a currency never goes beyond a certain upper level, that level becomes the resistance level. The best strategy, therefore, is to sell whenever the market reaches the resistance level.
There are several other marketing strategies that you can use, but these two have been used effectively for quite some time. If you’re looking to trade on the foreign exchange market, you may wish to start by using one of these strategies until you’re familiar with how the forex market works and which risks will lead to the biggest rewards.Read More and visit FAPTurbo.com100% Money Back Guarantee
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