Best Forex Trading Strategy Recommendation For Beginner
August 5, 2010 by Kelvin
Filed under Currency Trading FAQ
This is in fact a question that is asked by one of the subscribers of my newsletter.
What is the best forex trading strategy to be used as a beginner?
Personally I think that the best forex trading strategy for a beginner is forex trend trading strategy. There is nothing more profitable than being able to trade in the direction of the trend. The problem with most new traders is they are often looking for a reversal and in fact they are trying to trade against the trend which is something pretty dangerous for a new trader.
If you were to take a look at your forex chart, you will find that the movement in the direction of the trend is usually larger than the movement against the trend. Movement against the trend are sometime simply retracement and therefore it will not move much.
The most important thing to a trend trader is to have a good feel of the overall market trend for the currency pair he/she is trading. Once he/she has a good understanding of the market trend, they can then move to identify entry opportunity to trade the trend.
Usually, I will use the higher time frames like the daily chart or hourly chart to establish the overall trend for the currency pair. When I am looking for entry opportunity, I will usually move down to the lower time frames like the 15 minutes or 5 minutes as these charts can give better entry opportunity.
Other than the forex trend trading strategy, I will also recommend forex breakout strategy to beginners. It is because this method of trading can also generate higher risk reward ratio and it is easier to spot.
When doing breakout trading, the only thing you need to be careful of is the fake outs that are pretty common in trading. I have in fact written an article that addresses this problem and you can read it here.
The above are what I think is the best forex trading strategy for a beginner. If any one of you has any suggestion to this question, do feel free to give your comment below so that everyone here can benefits from each other knowledge.
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