Trading is essentially about trading something for something else. You get one asset and exchange it for another. Forex trading is one of the best trading markets as it offers 24/5 access, which means that you can trade Monday through Friday, at any hour of the day. Compared to Options or Stocks, you can only trade between 9 and 5, which is why you might feel limited regarding what you can actually do in the market.
In order to get started with Forex trading, you can start with as little as $100. Nonetheless, here are four forex day trading strategies that can help you make significant progress.
Table of Contents
Trend-Following Trading Strategy
Starting with the trend following forex trading strategy, this trend includes the identification of market movements and leveraging those market movements by capitalizing on them. Essentially, to leverage trend following forex trading, you must perform a technical analysis with the help of the right tools and enter trades in the direction of the current market trend. You should know when to exit the trait, especially when you detect signs of reversal.
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If you are new to forex day trading, then you can integrate this trading strategy to capture big moves that go up or down. Essentially, this strategy involves capturing extended moves in the markets while aiming for long-term capital gains.
Sometimes, prices tend to keep enduring, which is what makes trend-following a great strategy, as the aim is to capture most of such moves, if not all of them. With this strategy, you are not trying to predict the potential tops or bottoms, as the goal is to take full advantage of moves in different markets in the anticipation that your trading position will gain momentum.
If you are new to Forex trading, we recommend opening a demo account with Maven Trading to practice your strategy first.
The One-Hour Forex Trading Strategy
If you are looking for a structured tactic, then you might want to trade based on an hourly price graph. The 60-minute time frame offers you a perfect balance between faster trading styles and long-term yet slower trading strategies. The core aspect of the one-hour forex trading strategy includes the basic use of a one-hour chart to perform analysis and make decisions while incorporating price action and technical analysis.
To make the most of this strategy, you can benefit from multiple trading opportunities every day while holding trading positions for several hours. The one-hour forex trading strategy is also characterized by the emphasis on effective risk management, as this timeframe can potentially decrease market noise compared to the shorter timeframes. Thus, the one-hour trading strategy can provide you with more opportunities compared to the longer trading strategies.
The Four-Hour Trading Strategy
The next strategy for forex trading on the list is the four-hour trading strategy, which can be referred to as swing trading. As you might have already guessed, this forex trading strategy includes the screening of a chart based on a four-hour window span to analyze potential trading signals.
At the core of this trading tactic lies a four-hour chart. Most markets in the world of trading are open between eight and nine hours daily, which is where a four-hour chart might appear unimportant. A four-hour chart will only show two bars for each trading session, which is why you might consider looking at the daily chart.
However, the world of forex trading hits differently than any other trading in the world. Since the world never closes in forex trading, the four-hour strategy exhibits half of each trading session in the geography. Subsequently, each one of these trading sessions can exhibit different tones, which is where you, the forex trader, can look for potential trading opportunities.
With this tactic, you must focus on price movements to assess the trading markets and identify opportunities.
The Weekly Forex Trading Strategy
Some forex traders prefer intraday trading, which is also referred to as day trading and is a short-term trading strategy where the positions of currency pairs are opened and closed within the same trading day. Intraday trading aims to capitalize on the smallest price movements in the market without holding positions for a long time.
Now, when it comes to the weekly forex trading strategy, this is where you don’t have to rush to avoid market volatility. You can take your time while analyzing extensive forex market information. With this strategy, you can use the common price action trading patterns, such as the hammer candlestick pattern.
With the weekly forex trading strategy, your focus will be on long-term trends as you get to analyze the price action in relation to currency pairs over a period of seven days, which is why you will be referring to the weekly charts. As a weekly forex trader, you will be basically looking for the more enduring trends in the currency pairs’ price action.
