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Every trader that has learnt or tried forex trading for a while will find a bunch of forex trading strategies that can be used. Every strategy has different pros and cons, need different circumstance and data, and will works well in certain currency pair. Fundamentally, forex trading strategies can be split into two major: 1. Technical analysis This strategy is utilizing data as its main information source, especially charts to predict the future market movement. You can find numerous methods to read this data such as candlestick charting or Elliot wave, yet fundamentally they search for patterns in the chart for a certain timeframe and searching for relationships between various indicators like price and volume. This strategy is preferred by most traders and they put it to use in daily basis to determine the very best opportunity on the market currently. In most cases, every trader possesses their own method to interpret the data by utilizing different variables that developed specifically for a specific market he is in. That’s why even when everybody gets the same accurate data, only the one with the right method can convert it into profits. 2. Fundamental analysis This strategy relies on various economy factors such as overall state of economy, interest rates, production, earnings, and management. For instance: some news such as Non Farm Payroll or Wholesale Inventories can affect the market significantly. If you can predict where it will be headed before the news released, you can gain a lot of profit. On some occasions, there are important meeting holds by certain persons who have high influence in the state of economy. For instance, a meeting about deciding the new interest rate or inflation will have great impact in the currency values. Usually, it will be too late to enter the market when the result has released, so you need to utilize the current data to analyze and guess the result before. Not only short term trading, fundamental analysis can also be used as a long term forex trading strategies. This is somewhat complicated, but fundamentally you estimate the future trends of the market based on how the new policy will influence the market in long run. If you are still unfamiliar with forex and looking for a suitable forex trading strategies then I suggest learning technical analysis first, it is the basic of almost all strategies. Check out the four essential factors in studying forex trading in learn to trade the forex.Additionally, read the facts about a broker with great community for beginner trader at another look of etoro.
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