Forex Strategies – Range Trading and Trend trading

Posted in Offbeat8 years ago • Written by MAKNo Comments

Forex trading provides a number of benefits to the Forex traders and offers a tremendous amount of liquidity to the traders. It also offers low transaction costs and low margin requirements. The market operates 24 hours a day and opens the door for a variety of Forex strategies can be used to refine the way of online trading. There are too many strategies available for Forex trading suiting the styles of Forex traders and it is not possible to discuss all in one place. However we will discuss two common Forex strategies here which include Range trading and Trend trading.

Forex trading

2 Forex Strategies To Choose From

Range trading

This is a simple Forex strategy where a trader expects that the currency will come back to a longer term average. This strategy is also known as mean reversing strategy. The trader has to identify the price points which are suitable for him. The price level for entry and exit is determined by identifying the resistance and support levels. These support and resistance levels are easily obtained by the technical analysis of the price charts. The technical indicators are also used to determine the level.

Many Forex traders may ignore range trading since the profit perceived is limited in this case. It is obvious that if a trader is trading on a range he will reasonably look for closing the position at resistance level. This is a limited proposition and may not seem attractive as a trend trade or a breakout where a trader looks for big profits. But consistent online trading with the ranges helps in accumulating the profits for the trader and can found this strategy beneficial.

Trend trading

One of the most common Forex strategies is trading the trend. It is simply identifying the direction in which the price of the currency move and the trader places the trade in the same direction. This is a popular strategy because strong trends produce bigger results and the trader can make good profits in shorter time. The trend strategy is simple and can be used by traders of all levels of experiences. It is widely followed due to simplicity to identify the trade at trending times. A popular saying is ‘Trend is your best friend’

Traders Love Online Trading

There are many other Forex strategies available when you are doing online trading apart from the two mentioned above. A Forex trader can develop his own trading strategy as well and back-test the data on historical prices. This is a god step for a smart trader and what you have used is the best thing to give you confidence. But the bottom line is that you should stick to your online trading strategy and should follow every strategy with a discipline. Patience is also required in every case and one day it pays.

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