3 Successful Forex Trading Strategies That You Never Thought Of

Picture this: You’re sitting in your vacation home in Barcelona, sipping a glass of red wine, watching the tide go in and out. A cool breeze flows through your hair while you listen to the music of the ocean.

It’s the dream, but you’re stuck at your 9-5 job slaving away for corporate gain. Trading the Foreign exchange market is when you trade pairs of foreign currencies. This is a great way to break the cycle and start the dream, but it’s not as easy as it looks. Trading Forex takes skill and a lot of practice. Let’s go over a couple of successful trading strategies to help you get started. I’ll even throw in a few Dos and Don’ts so you can be even more confident and successful.

Successful Trading Strategies: Day Trading, Swing Trading, or Scalping

You may have heard of day trading, but what’s swing trading or scalping, and what’s the difference between them? Traders tend to consider themselves to be in one of these three groups. There are pros and cons to each type of trading. Here are a few to help you decide which can make your trades the most profitable.

Day Trading Pros and Cons

Pro: Short-Term Trades: A lot of people think that investing is a long-term process, but it doesn’t have to be. Day trading is a great way to make a profit in a short period of time. Day traders open and close their trades within the same day, bringing in an instant profit (or loss).

Con: Time consuming: Because each of these trades is short, you will have to execute more than one in a single day. Traders spend a lot of time looking at daily and 4-hour Forex charts.

Swing Trading Pros and Cons

Pro: Higher Profits: With swing trading, the goal is higher profit with longer term trades. Traders will watch daily charts to find their entry and exit points. They also keep an eye on monthly charts for support or resistance lines, and trend lines.

Con: Higher Starting Capital: Higher capital is required to make substantial profits with swing trading. Traders will open 1-2 trades per week, each of which will pull a successful profit.

Scalping Pros and Cons

Pro: Less Starting Capital: One of the good things about scalping is that you don’t need to be wealthy to get started. You can place trades with as little as $10, the trick is to use the right lot size.

Con: Highest Risk of Burnout: Scalping is a full-time job. It takes many hours of studying
Forex charts. You can expect to open and close 10-15 trades per day. Some trades you can easily spot, others take time and tools to predict.

No matter which strategy you choose, successful traders need to have certain skills. Some of the most important would include patience, risk management, and discipline. RedHotFX offers some suggestions for more ways to sharpen your trading skills.

Do you have any other successful Forex trading strategies? Share your thoughts with us below in the comments!

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