3 forex trading strategies for every trader

In this article I have outlined in brief some of the forex trading strategies that you can try. These strategies are suitable for the experienced traders as well as the beginners who wish to trade on the various forex markets and are in search of good effective strategies. The trading strategies can also be used on any size of trading account which is the mini, standard or micro.

The strategies that I have outlined below are proven trading strategies and they have certainly achieved great results for several traders and for sure they will work for you too. You should also bear in mind that with each and every forex strategy you adopt you should consider making great use of risk management at all times.

As a trader you may be faced with great difficulties on how best you can select a forex strategy. First and foremost you should choose are strategy that suits you.

Forex Scalping System

This is one of the easiest strategies to follow and it focuses mainly on pinpointing resistance and support points, Fibonacci retracements can be used for these. If a price reaches a major support point you would have to invest big but if it reaches a major resistance point then you would have to invest less. Make use of small profit takes and tight stops. This will enable you to get high dividends through out the day and on each every trade. A small bounce usually occurs on major resistance and support points. Making use of a broker with small spreads would be a noble idea so that it does not take up your profits that much. This is a great strategy that you can use and you are able to try this by opening a demo account first.

Forex Hedging Strategy

The most common hedging strategy is the frequent selling CHF/JPY and buying GBP/JPY. The major target is to obtain great profits from the price movements. A GBP/JPY will earn great interest due to the interest rate differentials and you would also have to pay short for CHF/JPY because its interest is very low than compared to the GBP/JPY.

This strategy is considered to be of a very low risk because the currency pairs CHF/JPY would not go in the opposite direction tremendously and how ever this is a common carry trade used by several traders. It is a good strategy that will certainly give you a favorable dividend.

Forex Arbitrage System

A good arbitrage exists between spread betting and currency trading brokers. This situation arises due to the fact that when you make use of spread betting you will have the option of having pips prices in different currencies. For example you may have a long position on the GBP/USD at which your pips are priced at £7 per each point. In order for you to hedge you would make a short position for the GBP/USD making use of the standard lot.

Before you decide to adopt a trading strategy or system that you will use you should make sure that the system or strategy is very simple to use. Do not make use of a strategy that is complex for you to use and a good strategy or system is the one which takes you a few hours or a day to understand and master. There are several strategies available and these can be used to drive your wealth to great prospects.

If you are a beginner to forex market trading you should first of all try several strategies making use of a demo account so that you are able to gain experience and then you may proceed to open a real account and trade.

The next step you should consider is margin buying. This is the most common strategy that is used by several traders. Margin buying is when you trade using borrowed money. Although at times it can be very risk but if used with a good strategy and system you will eventually benefit more from money that was not yours. You simply take all the profits and return the money you borrowed.

Forex trading is very simple and you are guaranteed to make a substantial income if you are to trade on a daily base. Forex trading as a profession can be very rewarding.