4 Best Advanced Forex Trading Strategies Used By Successful Traders
Foreign exchange, also popularly referred to as Forex or simply FX, is the most traded, the largest, and the most highly liquid market in the world today. The simplicity and complexity of this market greatly depend on the trader.
At the start, it may seem to be just too simple. As a trader, it seems like you just have to choose which direction your chosen currency pair will go and then collect your earnings. But Forex trading is more than that and it is not just about winning all the time. Just like with other trading options, if you deal with Forex trading you can expect that sometimes you will win, sometimes you will lose.
Below are a few advanced Forex trading strategies that many successful traders use today.
- Forex Scalping
This advanced trading strategy has been tested and trusted to provide traders with satisfactory trading profits. The main goal of Forex scalping is to quickly gain profits. With this strategy, trading is done in shorter time frames. Through this, you can be able to frequently gain profit after slight movements in the currency market. But in order for you to succeed in this type of strategy, you need to carry out a detailed market analysis before offering a trade.
This innovative and impressive technique works well for day traders. For best results, you should do scalping together with some supportive technical conditions and a news release.
2. Carry Trade
The carry trade strategy involves the differences in the interest rates that are paid in specific currencies. If you hold a currency for over a day, you will earn an interest for such currency. On the other hand, if a currency is short, it will incur an interest charge. Traders who are using this Forex method uses a currency with low interest rate to fund the purchase of a high-interest currency.
3. Position Trading
Position trading is all about putting a trade based on the overall exposure of the trader to a currency pair. With this strategy, you will position your trade at the average price of your chosen currency pair. For instance, if you previously make 2 short trades on USD/EUR at 1.30 and 1.34 respectively, your average position would be 1.32.
The best thing about this strategy is that it does not need much of your daily attention. If you want to succeed with this strategy, you must carry out a thorough long-term market analysis. Position trading is known as one of the most effective strategies used by many top-earning traders in the world.
4. Triangular Arbitrage
Triangular arbitrage is a Forex trading method that is often used by professional cross rate traders. This trading technique involves three simultaneous transactions done in three different currency pairs. If done correctly, you can be able to get a locked in profit and a net flat position.
Always remember that there is no single foolproof Forex trading system and technique that will provide you with a hundred percent success. Each of the trading systems is prone to losses and each of the advanced Forex trading strategies involves risks.
