Forex Trading Strategy for Beginners


Forex Trading for Newbies

Anyone who wants to make cash from currency trading, will require some solid currency trading strategies. Forex is similar to anything else in in our country. If a person wants to perform it well, you require proper training and some practice. And if you are planning to get into forex you better do it well otherwise you could lose your shirt.

Getting the practice is not a problem since mostly all Fx brokers will let you open a free demo account. Actually they encourage it, because they are hoping that once you are seeing profit in your currency trading demo account you will go ahead and invest real cash with them. So that they can make money from the spread or the fees that they charge on your account. Hopefully you will make enough money to pay them and still have money left, so everyone is making money.

Constructing profitable currency trading strategies is a tough. You can find lot of currency trading systems online, but many are very complex for the beginner. What you probably want is something very straightforward so that you can start currency trading on your demo account right away.
If you search on google you can find that there are plenty of software systems which brag to make you huge amount of money. If you are a fresh trader I have to caution you that these applications are not money making machines. I am not suggesting that all those applications are fraud or scam. There are good programs like FAP Turbo Robot and few others. The newest entry Ivy robot also shows potential. Go through the IvyBot review & results here. Still these applications can not replace a traders skill and knowledge.

A Simple currency trading Strategy
So let us have a look at a simple currency trading strategy using what is called support and resistance. You can utilize this technique when you have a condition where the market is fluctuating up and down within definite boundaries. Hence if you look over an extensive period it is within an upper position and a lower position.
You will notice this on the forex charts which you can get access in your demo account provided by your forex broker. See the candlestick chart over a legthy time period. You should be able to identify a time when the currency price was moving up and down between certain points.
You could draw a line along the top points. This line is called the resistance line and it will be horizontal. When the price hits this line it moves down again to keep within the boundaries. So at that point you could sell the currency pair.

Similarly if you draw a horizontal line along the bottom points this is called the support line. When the price hits this line it moves up again, so you could buy at that point.

If you try this in your demo account on live prices you will find that sometimes the price does not bounce back into the zone and on those occasions you will lose. Usually this is because a trend was beginning to form. You can use the indicators in your charting software to check when a breakout like this might be expected. From this you can develop your own system based on support and resistance on the one hand and following new trends on the other.

Be sure that your system is working profitably over a long time (several months) before you start using it to trade with real money. forex trading is always risky but by testing your system in this way you can be more confident that you have created a profitable system from your forex trading strategies.

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