Forex Trading Strategies for Beginners!

Forex market activity had been elevated throughout 2020 and the increased demand for retail trading services saw plenty of new individuals joining the financial markets. The US dollar tumbled following the March spike and because of that, numerous trading opportunities emerged on high volatility.

Managing these conditions might be challenging at first for beginners, but there are still many trading strategies like the ones at immediate connect with a proven efficiency that can work well. There are also forex automation services that can help individuals who have little knowledge about stock trading.

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#1 MA + Oscillator Mix

One of the most basic forex trading strategies is using a combination of moving averages and one or multiple oscillators. Traders continue to fancy such approaches due to their simplicity as well as their proven efficiency.

There are many ways to use moving averages. They can be used as dynamic support resistance levels or as indications for the broad market context (bullish sentiment when price trends above MA and bearish in the opposite scenario). Some of the most popular moving averages are the 20 EMA, the 50 SMA, the 100 SMA, or the daily 200 SMA.

With regards to oscillators, these indicators are used to spot overbought or oversold conditions. Relative Strength Index (RSI) or Stochastic are by far the most popular. Generally, professionals use them on higher time frames to be sure that there will be a limited number of false signals generated.

#2 Price action breakouts

For some traders, using technical indicators is overcrowding charts and prevents them from seeing the small details in the price performance. Trading naked charts is another great way to take advantage of the FX market, especially when looking for opportunities in the direction of the dominant trend.

Trading breakouts around key support/resistance areas (past high/lows, swing points, etc.) would mean that the order flow will be favorable and trades could be in the negative for a short period or even not at all. The trickiest part would be to learn to apply such strategies in the right context, given support and resistance areas can represent the place where the markets start trending in the other direction. Discover Forexiro user experiences and testimonials.

One great example of the effectiveness of breakout strategies is the performance of EURUSD, which had managed to break above 1.20, a major resistance area, and continued to move higher, as buyers were having the upper hand.

#3 Engulfing price action – reversal strategy

The “trend is your friend until it doesn’t” should be one of the mantras of forex trading enthusiasts and because of that, they need to be prepared for trend reversals. According to Alchemy Markets Review, one of the best ways to profit from a market turn is by spotting engulfing price action formation.
More specifically, this occurs when a counter-trend candle engulfs one or more of the prior candles, suggesting the other side of the market has regained control of the order flow. Applied into the right context, engulfing setups can offer great opportunities to anticipate counter-trend moves.

All these three forex trading strategies are easy-to-learn for beginners and with plenty of free information available online, they can not only find basic information but also ways to increase accuracy and effectiveness.