Online Forex Trading Strategy – In a highly volatile market where prices are moving quickly, traders are desperate for something tangible to rely on, and that is where forex trading strategies come in. A forex trading strategy is a technique that forex traders use to help decide whether they want to buy or sell a currency pair at any given time.
Online forex trading strategy
An online forex trading strategy can be based on technical analysis, fundamental analysis, or both. Strategies are usually built on trading signals, which in essence are triggers for action.
There is a well-known Online forex trading strategy that can be easily found or the traders themselves can create their own strategies. You may also be interested in one of the most popular trading tools – cryptocurrency trading. To improve your knowledge of cryptocurrency trading, you can learn cryptocurrency trading strategies.
Swing trading
This strategy is a long-term trading strategy within the Online forex trading strategy, when trades are kept open from a few days to several weeks at times. The essence of the swing trading strategy is to take advantage of the large market “volatility”.
Fundamental analysis plays an important role in the longer time frames. Strong trend moves are often triggered by important or unexpected market news, such as corporate income statements or central bank meetings, which means swing traders need to be aware of market fundamentals.
There are ways to develop a reliable trading plan. Below are the most popular swing trading techniques that we would like to share with you in Online forex trading strategy.
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Preview swing trading tactics
- Moving Average Crossovers – When the short-term moving average crosses above the long-term moving average, this is a buy signal, as it indicates that the trend is heading up. This is known as the “Golden Cross”.
- Cup and Handle Patterns – The cup and handle is a cup and handle technical chart pattern where the cup is in the shape of the letter “u” and the handle has a slight downward drift.
- The cup and handle is a bullish signal that extends to the upside, and is used to spot buying opportunities.
- Head and Shoulders Patterns – The head and shoulders pattern is a technical indicator with a chart pattern described by three peaks, the outer two being close to high and the middle being the highest.
- A head and shoulders pattern describes a specific chart formation that predicts an upward to bearish trend reversal.
- Flags – Flags are areas of strict consolidation in price action that show a movement in the opposite direction following immediately after a sharp directional movement in price.
- The pattern usually consists of five to twenty price bars. Flag patterns can be either an uptrend (bullish flag) or a downtrend (bearish flag) within the Online forex trading strategy.
- Triangles – A triangle is a chart pattern, depicted by drawing trend lines along a converging price range, indicating a pause in the prevailing trend. Technical analysts classify triangles as continuation patterns.
Main reversal candles
Major reversal candles can also be used to complement basic tactics for more accurate execution. A major reversal is a one-day trading pattern that may indicate a trend reversal. Other frequently used names for the key inversion are “one-day inversion” and “inversion day”.
Day trading strategy
Day trading strategy refers to trading within one day. All trades must be opened and closed during the trading day. The day trading strategy is applicable in all markets, although it is used more in currency trading. When implementing a day trading strategy, the trader monitors and manages the open positions in the market throughout the day.
