Forex trading is a complicated process that requires extensive analysis and, usually, total commitment to it. Meaning that to make a living with forex trading in Nigeria, you have to dedicate your whole day to it. A sizable percentage of beginner traders think that they can get rich within months, getting all inspired by surreal success stories of people who made an uneducated guess and got miraculously lucky. We assume that you’re not one of those people and did some basic research on what the Forex market is and how it works before getting familiar with day trading strategies.
Yet if you need to refresh your memory and maybe catch up with the latest trends in Forex trading – take a look at this Forex trading guide for beginners. It has everything you need to understand the higher-level educational articles, contains a short Forex glossary and an explanation of several ongoing trends. And if you’re ready to start picking your preferable strategies – we recommend you to take a look at the following three.
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Breakout Forex trading strategy is one of the simplest and the most effective strategies for beginner traders. There are, of course, more effective strategies, but they’re way more complicated and require more experience and research to utilize. Breakout Trading, however, can be easily explained to a 5-year-old.
So, when you look at the charts, you can often see that the currency pair has resistance and support levels, meaning that all fluctuations fall within a specific range. Resistance is the upper level, which the pair haven’t exceeded for a considerable time, and support is the lower level. When one of those levels is broken, it often indicates the trend, and if you enter at that point – you might catch the skyrocketing trend and make profits in quite a short time.
Momentum trading is based on the assumption that solid price movements indicate that the trend is about to go on for quite some time, and when the movements start to weaken – you should be ready to exit the trade. It actually makes sense if you think of it, but there’s one detail you have to keep in mind: the momentum trading strategy won’t work too well with exotic pairs.
If you’re trading an exotic pair, where one of the currencies is highly volatile – it’s easy to confuse the momentum indicator with a natural fluctuation. Such currencies behave like that all the time, and if the trend isn’t powerful – you shouldn’t assume that there is any momentum.
Inside Bar Trading
The Inside Bar Forex trading strategy is used in continuation pattern trading. When on the chart, you see that the bar falls entirely within the high to low range of the bar before it can be called “the inside bar.” The previous bar is referred to as “the mother bar” . For our purposes, it has to be on top or at the bottom of the curve.
The best inside bar you get forms after powerful moves on the market, both upward and downward. They indicate the price consolidation period, meaning that the trend will continue as soon as the market settles a bit. The problem with these is that they’re easy to misinterpret. An inside bar might be either an indicator of a strong trend or its turning point. This strategy, as well as all the other ones, requires research before implementing it and a viable trading plan to stick to. Don’t forget about discipline; learn new strategies, and eventually, you’ll find the one that suits you best!