There’s no doubt that the forex market is a huge global entity, and one that now boasts a value well in excess of $2.409 quadrillion.
While entering this marketplace may be incredibly tempting, however, it’s also fraught with risk, with the forex market classed as one of the most volatile and speculative entities of its type in the world.
You can negate some of these risks through the deployment of a viable forex trading strategy, but which ones are best for beginners? Here’s our top three picks.
The Trend Following Forex Strategy
This strategy is one of the most popular amongst beginners, with trend following renowned for helping newcomers to establish a solid foundation and genuine sense of expertise.
This strategy is based primarily on the close observation of charts, patterns and market shifts, while it taps into the fundamental notion of capitalising on the market’s innate volatility and trading the space’s various ups and downs.
Also Read: Are Forex Trading Bots Profitable?
To achieve this successfully, you simply need to keep your eyes on a relevant trend, monitoring it over a period of time before executing an informed trade.
Market trends are typically short, medium or long-term, so you’ll also need to identify which ones are most relevant to your overarching trading strategy.
The Daily Fibonacci Pivot Forex Trading Strategy
While this may sound like a complex strategy, it’s actually one that’s relatively straightforward and suitable for novice traders.
More specifically, this strategy employs so-called “Fibonacci retracements” (one of the top technical indicators in forex), which are combined with daily, weekly or monthly pivot levels to calculate support and resistance levels.
Each of these datasets would offer users an insight into specific trade entry points, with the majority of traders utilising the 38.2%, 61.8% and 100% retracements as part of the forex trading plans.
The Simple Moving Average Crossover Strategy
We’ll close with moving average strategies, which can be advantageous to both professional traders and market newcomers alike.
This is arguably the simplest of all forex trading strategies, as it;s focused on the so-called “Simple Moving Average” (SMA) indicator. This identifies three moving average factors, namely a fast-moving factor, a slow-moving factor and a trend indicator.
By using these measures and overarching Simple Moving Average Crossover Strategy, it’s possible for traders to determine variable trend directions and create viable buy and sell signals.
The data utilised can be garnered over the course of 30 days or longer, with this offering a clear insight into the average price over a target instrument.
