Jun 05, 2020

To succeed in the forex market, traders must have a suitable forex trading strategy that fits their style and trading conditions. Today, we will show you the 4 professional trading strategies PDF that most professional forex traders use.

 Download professional trading strategies PDF

The definition of scalping trading strategy

Speaking of scalping strategy, it allows traders to gain profits during periods of price changes. It is a fact that traders need to conform to a strict strategy if they do not want to lose their profits. It is a must-do task for traders to have adequate trading tools, including live feed and stamina, if they want to achieve success with this trading strategy.

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How to apply scalping strategy

In order for us to know how to start scalping strategy, it requires us to understand how it works. Basically, it works based on a hypothesis that the majority of stocks will finish the initial step of a movement. After doing this, several stocks will stop to upgrade.

The ultimate of trading forex is to make profits. Therefore, scalpers normally want to gain as much as they expect. In fact, this strategy can be achievable as it increases winners and losers win size. In reality, traders can make profits with a long-term time frame when they win half or less than half of their trades. It should be noted that traders will achieve good results if their ratio of winning is higher than loss one. 

The definition of day trading strategy

Day trading strategy is the buying and selling transaction of forex instruments in a short period of time. In other definitions, day trading is about settling, buying and selling during a day. However, day trading may be longer to a few days or a month. Normally, brokers may finalize these transactions. By the internet today, single investors may do it.

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How to apply day trading strategy

The business strengths are not enough attention of traders following day trading strategy. They are based on technical analysis or stock price trend.

Stock is no single factor of day trading. Other instruments applied are options, futures, commodities and currencies. There are advantages and disadvantages of day trading investment. 

Day trading strength is the in-day profit making with a big trading regularity for increased profits optimization. Investors therefore have advantages from trading size and speed to enhance the money making with a small movement. There are 2 important functions of day trading which are keeping market efficiency and adding liquidity.

However, the sickness is the high-speed and high frequency. Hence, no compliance to trading discipline will lead to losses. While there are traders with ability, luck, discipline and bravery in this risky game of getting high frequency trading, sophisticated computer programs are used to address trading orders to the market in high frequency trading.

The definition of hedging strategy

Direct hedging is a term referring to the ability to buy and sell the same currency pair simultaneously. When the time is right, the trader can possess higher money earning despite the total net profit of this remaining opening trade is nothing. There is no financial risk so forth.

This forex hedging strategy would protect traders by contrasting direction of trade. In other words, even if the market movement is against your initial trade, the opposite trade would protect your position.

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How to apply hedging strategy

Example: a buying action USD/GBP will be contrasted with selling GBP/USD. When the market move negatively affects his buying action, GBP value drops, his trade is secured by the opposite trade with the rise of USD. Or when he predicts the market move in accordance with his first trader, he would close the second trade for profits.

In another word, a trader against your initial trader would create a win-win situation. Therefore, Brokers are suspecting to ban Forex Hedging on the same account. The alternative way is to hedge with a less secure foreign exchange by two substitute pairs. For instance, GBP/USD and USD/CHF would protect USD exposure. However, it has uncertainties. Unbalanced counter-trade appears via the uncertainty of GBP and CHF. Be smart and logical in your choice of currency as the hedging strategy is a technique with risk of value uncertainty.

The definition of swing strategy

To put it briefly, swing trading strategy is a trading style that lasts for long and requires patience from traders to hold their positions for up to days. It is suitable for traders who don’t have time to keep up with the charts during the trading day but can spend hours analyzing the market and giving predictions at night. These people are usually those who have full-time jobs or still go to school. They only have a few hours a day to stay up-to-date with the market trends and current economic situations.

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How to apply swing strategy

Swing traders will look for “swings” in a relatively medium trend. Only when there is a high chance of winning do they decide to take part in the market. When they see an uptrend, they will go long (buy) at the low part of the swing and go short (sell) at the high part of the swing. Their aim is to take advantage of temporary counter-trends.

When you try swing trading strategy, your trades regularly last for days. Therefore, you will need to set larger stop losses in order to overcome volatility. Pay attention to that and put it in your money management plan. And of course, sometimes you will encounter trades that go against you when you’re holding the positions because the price of a currency pair can be very fluctuated during the shorter time frames. So it’s vital for you to remain a cool head. Have faith in your analysis and predictions. Swing traders don’t care about spread because they are aiming at a very large amount of money. They are ready to trade with pairs that have high spread and low liquidity as long as they are easy to analyse.

Those are the 4 professional trading strategies that we believe you will benefit a lot from each of them, as long as they suit your time and funding.