When it comes to the currency exchange market, there are a lot of things a beginner should know. Dealing with finance can be challenging at first.
For example, one can be concerned about how to choose a broker and how to get the needed skills and knowledge to move from a demo account to earning real money. However, Forex trading for beginners always means learning strategies and choosing the right one.
First of all, you need to understand that there is no single approach that is going to work for each trader. Choosing a Forex strategy should be based on individual characteristics. For instance, a plan for a lawyer from Nigeria will differ from one for a doctor from South Africa.
That is why we will cover the main methods of international Online Trading Forex so you can choose one corresponding to your goals.
1. Position Trading: If you use this method, it means that the main strategy would be to hold trades. It is a long-term approach and traders usually hold trades for several weeks or months. This method is available on all the Forex brokerage platforms, such as ForexTime. The main advantage of position trading is a bigger possibility of success as you do not need to concern with short-term changes in exchange rates on the market. This approach can be compared with investing in stocks, as it is a long-term deal. Moreover, you will not have to spend as much time on Forex. However, this method requires a deep understanding of currency and the ability to make an analysis based on all the factors that can influence exchange rates.
2. Swing Trading: This strategy is based on holding trades for days or weeks. Unlike position trading, this is a middle-term approach. The main advantage of such a strategy is that you do not have to leave your job as Forex will not take a lot of time. Moreover, there is a real chance to be highly profitable. However, you do have to pay attention to overnight risks. You will also not be able to participate in big trading bets, as they are usually short-time with higher risks.
3. Day Trading: This strategy means that a player holds his trades for hours or minutes. That is why it is called short-term trading. This is the most common strategy among beginners, as there is no need to make analytics and have a deep understanding of the exchange rate system. Such trades are more profitable but also have higher risks. You will also need a lot of time to do day trading, as users usually have more than one activity going on at the same time. There is a little chance that you will be able to combine work and Forex trading using this approach.
4. Scalping: Scalping means that a player will hold his trades only for minutes. The only thing you need to be concerned about is the position of a currency on the market at a particular moment. The main advantage is a lot of possibilities to trade each day, as well as high potential income. But more risks come under better conditions: a lot of negative experiences with Forex come from using this high-risk strategy.
The choice of strategy depends on background knowledge of a person, available time, and finances he/she is ready to invest in.