Forex Trading Strategies

Are you interested in learning how to trade Forex? Have you been searching for a professional trader course that will teach you everything you need to know? If so, you have certainly come to the right place, as we at G7FX are the premier team to help you achieve that goal. We offer two trading courses, catering to both beginners and professionals, offering you the very best training in all things Forex. With G7FX, it doesn’t matter what your background is, whether you wish to trade full or part-time, or if you have zero experience in Forex trading. Our courses will cover everything you need to know, and you will be mentored by founder Nirav, who has years of experience. To find out more about our professional trader course and if it is right for you, send Nirav an email at nv@g7fx.com and schedule a call outside of trading hours.

Forex trading markets are active 24 hours a day, presenting a tempting career opportunity for those seeking additional income streams. With high levels of risk, one cannot break into such a volatile market without the right trading strategies in hand, unless they want to sustain recurrent losses. G7FX offers leading courses designed specifically for novices with no previous experience. The beauty of our courses is that they are self-paced, meaning that you don’t have to quit your full-time job to take a shot at your trading dreams.

With our foundation course, you can cover the basics, then supplement your skills with the Pro course, in order to add the finishing touches to your growing skillset. You don’t have to worry about confusing trading jargon or long-winded modules. We provide easily digested material and full customer support until you’re well on your way to becoming the trader you’ve always wanted to be.

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To get in touch regarding our learn to trade educational services, email nv@g7fx.com to arrange a call outside of market hours.

    What is Forex Trading?

    Foreign exchange trading, more commonly known as forex trading, is the exchange of foreign currencies for business, tourism, or commerce. Traders exchange one currency for another in a global marketplace containing trillions in liquid assets.

    If you’re familiar with exchange rates, you’ll notice that currencies tend to come in pairs: USD/GBP, for example. These are called exchange rate pairs, and they are heavily featured on forex trading platforms. Individuals engaging in trading of this sort generally aim to expand the variety of their business portfolios, forecast global political events, or offset the risk of currency and interest rates.

    The wide-reaching effects of global commerce and trade relations make the forex market one of the most central in the world. Most people do not realize that they are unwittingly participating in the inner workings of the market. The forex market is unique in that it is highly active at almost all times of the day, with energetic exchanges taking place in the world’s major financial strongholds: Hong Kong, London, Sydney, New York, Tokyo, Zurich, Frankfurt, Singapore, and Paris.

    Quotes can vary markedly over the course of the day; due to time zone differences, the end of one market day in one part of the world is only the beginning of another in a different time zone. Meanwhile, the market itself is built on over-the-counter transactions. These exchanges form the bulk of this industry, as there is no centralized marketplace people frequent in order to obtain foreign currencies.

    Forex scalping strategy

    Forex scalping is a strategy exploiting the price fluctuations of a certain currency, to achieve profits on the market. Traders will rapidly buy and sell a certain exchange pair, taking ownership for mere minutes, even a few seconds. This fast-paced form of trading can result in significant gains for the trader at the end of the day.

    Small movements in currency price are called percentage in point, or pip. Traders utilize this value to estimate their gains and losses, leveraging this information to buy and sell currency, with the end goal of profit in mind. Most traders resort to borrowing capital from a brokerage firm to gain entry into the market, giving them a significant advantage. However, just like any high-stakes market, major losses can ensue if market rates do not trend in the trader’s interest.

    Forex day trading

    Day trading is very akin to scalping, with only ownership time drawing a line between these two trading forms. Whereas scalpers take advantage of pip to buy and sell currency as fast as they can, day traders will typically hold their assets for a full day before selling them off at night. In other words, keeping a hold of assets overnight is not favoured. This strategy is more attuned to traders who can afford to spend daylight hours analysing and dissecting the risk/benefit ratio of a certain trade, with the binary results of either profit or loss at the end of the day.

    Forex swing trading

    Another slower strategy, as opposed to scalping and day trading, is swing trading. This type of trade involves holding on to deals for extended periods of time, ranging from 2 days to several weeks. Ideally, it is best suited to those who do not have the luxury of monitoring minute-by-minute trends throughout the day, but invest a few solid hours every night following up on global economic patterns.

    Forex position trading

    Just as the name suggests, this forex trading strategy entails holding a position for long periods of time. The ultimate goal is for the trade’s long-term value to grow with time, best suited for those with demanding day jobs. Such traders have strong foundations in market principles and can rule out emotions when prices don’t fluctuate in their interest.

    Carry trade in forex

    Carry trade is an increasingly popular strategy in the forex arena, whereby a high-yield currency will fund a low-yield currency, ultimately earning the trader considerable profits. Traders aim to exploit the vast difference between the going rates of the two currencies to accrue a profit, given that the exchange rate of the two currencies remains unchanged.

    Advanced forex trading strategies

    In addition to carry trade, the advanced forex trader has a few advanced tricks up his sleeve to remain ahead of the game. Currency options trading, for one, grants buyers the liberty to set the terms of buying and selling currencies, to reduce the down potential of their purchases, while almost interminably scaling up their profits. They are under no obligation to deliver an actual physical asset, but retain the right to determine their own exchange rates of a certain currency before a certain expiration date.

    Here, the power of leverage is used, where traders deal with the currency without having to handle corporeal amounts. Another advanced forex trading strategy is the use of interest rate parity. With this concept, the relationships of different interest rates are analysed, ultimately aiming for an equal rate of return on all currencies, regardless of their designated interest rate.

    Perhaps another of the famed trading strategies of renowned forex traders is forex algorithmic trading. With increasing technological advancements, algorithm-powered trading platforms have allowed greater transparency of trading patterns, real-time market trends, and automated trading options. This on-screen option delivers fast and highly accurate information to traders, creating a verifiable path to better profits and revenue streams.

    Bounce strategy

    As is well known, market trends tend to fluctuate. Traders use previous trends to forecast and direct their future trades. When traders utilize the bounce strategy, they are essentially buying an asset when its price has fallen to a support level. According to reaction theories, this fall is hypothesized to induce a secondary rise, which is exactly what the trader hopes to make a profit off of.

    Running out of steam strategy

    Though this sounds counterintuitive in an industry aiming for the highest profit possible, this strategy falls back on a surprisingly sensible rationale. Just as bouncing refers to a potential increase in price, this reverse engineering technique keeps an eye out for upcoming peaks in market price, so that traders can identify when prices are getting too expensive. As soon as price drops, the trend heads south, and traders can immediately sell their assets for a hefty profit. With general rules of thumb such as this, risk management becomes fairly straightforward for the aspiring trader.

    Breakout strategy

    It’s important to keep an eye out for novel trends on the market charts, as trading functions fluctuate unpredictably over the course of time. Because of unexpected volatility, record highs and lows are not permanent; traders constantly change their buying patterns, sometimes settling above a previously determined price for certain assets. This is referred to as a “breakout”: the established buying and selling values break through certain plateaus and create a new threshold for prices.

    Breakdown strategy

    The opposite stands true as well. Similar to broken highs, lower price levels can diminish even further. As a result, traders hasten to short sell assets they view to have declining value, hoping to make a profit nevertheless.

    Overbought and oversold

    Instead of focusing solely on human prediction, this strategy derives its effectiveness from a mathematical formula: RSI, or relative strength index. When RSI is high, the market is deemed to be overbought, meaning the trader can expect an upcoming decline in chart trends. Conversely, when RSI is low, it is described as oversold, so buyers will scrutinize trends running out of steam, to jump on the first increase in price.

    The Best Forex Trading Strategies

    No matter your preferred techniques, it is vital to choose trading strategies that encompass market volatility, and that take your current lifestyle and day job into account. Sustainable success in the industry requires individualized methods to spot profitable opportunities, act upon them with no delay, and minimize losses. You will inevitably pass through a trial and error stage, as you pinpoint the strategy that works best for you and your trading goals.

    How to Develop a Forex Trading Strategy

    No matter your experience level in the trade, a solid plan helps you identify auspicious opportunities and minimize crippling losses. Most important is comprehending the general concepts of technical analysis, to spot trends on market charts and analyse data quickly to retrieve actionable information. Directions of market functions help you think up entry and exit points, pricing, and above all, the ideal timing for your trading.

    A second but no less important skill is fundamental analysis, which focuses not only on numerical analysis, but identifies potential strengths and weaknesses of the market. This is highly dependent on geopolitical events, natural disasters, and other external factors that ultimately affect market price.

    With trading comes undeniable risk, and the more profit to be gained, the higher the subsequent risk. Consequently, it’s crucial to define stop loss policies, rules of thumb, and entry/exit points, to protect yourself from major losses that are difficult to recover from. Finally, make it a point to test your forex trading strategy, learn from your mistakes, and identify areas of weakness.

    Strategy Modifiers When Using a forex Trading Strategy

    Sometimes, you may notice that you are not yielding optimum results from your chosen trading strategy. This is natural, as market volatility does not always work in your favour, no matter how many strategies you choose to use. This is a golden opportunity to look towards other untested trading strategies, which may open the door to surprising profit opportunities. Don’t be afraid to use trial and error to your advantage, as this is the optimum success strategy for the long-run.

    Hedging Forex

    Hedging essentially means protecting currently existing assets from low interest rates or downward market trends. Enterprises will typically engage in forex strategies for protection purposes from downside risk, not for profit.

    Price action forex trading strategy

    Price action trading resorts to a fully technical approach, as opposed to one inclusive of fundamental analysis. In this regard, traders choose to focus purely on price as an indicator for their buying or selling choices. Utilizing typical candlestick charts, they watch closely for fluctuations in price to inform their scalping decisions. They decode support and resistance levels, in addition to varying trend lines, and translate them into subsequent risk-reward ratios.

    When the latter are deemed positive, trading can then take place under favourable conditions allowing for minimal losses. The trade-off here is that buyers and sellers do not consider external factors influencing current market price. These include global events, economic growth patterns, natural or man-made disasters, inflation, and more. Scalping signals are therefore of a purely technical nature, where the rapid influx of numbers can inform minute-based scalping decisions, as opposed to a more in-depth fundamental analysis of national and global trading factors.

    Picking the Best Forex Strategy for You

    Your preferred trading strategy is the key player in how well you perform on the market. Though risk management and trade options are undeniably important, your go-to trading style dictates your entry and exits points of the market, more specifically whether or not they are price-appropriate. Trading strategies also incur if the charting trends themselves will move in a favourable or downward direction.

    It goes without saying that there is no singular right method to tackle the currency trading market, or else everyone would be out to gain profits in this field. Whatever your selected strategy, it must be resilient enough to adapt to unpredictable volatility and changing trends, with a few fundamental principles guiding all your trading decisions. That being said, your personality plays a huge role in determining the strategy you go for.

    Trading personalities could not be more different. To ensure sustainable growth and success in the field, individuals resort to strategies that best suit their character traits and their daily lifestyles. You may be someone who prefers a very fast-paced sort of trading, where you only hold onto trades for a very short period of time. In this case, scalping is an ideal choice for you.

    Or maybe you’re the type to maintain ownership of trades in the long-term, preferring a more in-depth analysis of impacting factors. In that case, you can opt for slower options, like day or swing trading. Whatever you select, it’s best that the strategy is in line with how you personally operate. With this in mind, the four main methods of trading are scalping, day trading, swing trading, and position trading.

    Strategies for Part-Time Forex Traders

    The bustle of daily life, with the added pressure of full-time jobs, means that very few people actually become full-time forex traders. Instead, everyday individuals choose to spend little pockets of their time on trading platforms, as part-time traders looking to make some extra monthly profit.

    However, such erratic trading patterns can translate into monumental losses. Thus, it becomes ever more important to adapt your trading strategies to your part-time schedule. Firstly, know what time trading markets open. The New York market, for instance, operates from 8 am to 5pm EST. That way, you can be on your screen when trade is in full swing.

    You can harness the power of stop-loss orders, taking advantage of your computer’s trading programs to protect your money in case the market takes an unexpected downward swing. As mentioned previously, it might be beneficial to adopt price action strategies, to make the most of your time analysing technical trends instead of fundamental ones.

    Other Forex Trading Strategies

    Other forex strategies that could give you an advantage despite your part-time commitment include taking more long-term trades. When you hold on to less trades for more time, you can reap the full potential of the select currency pairs you have chosen. Such a sensible forex strategy drives your trading profits upward and sets back your losses because it means that you have invested time in fully comprehending your currency pairs.

    If you’re only available to glance at your computer trading platform once a day, you might benefit from following long-term trends instead of shorter intervals. Establishing stop loss orders is also a helpful safety net for when the market makes an unexpected move against your interests.

    Most forex platforms will offer features for this, in addition to allowing you to set up pre-determined limit orders and entry/exit points. This way, your computer follows automated orders to keep your portfolio afloat during your online absence. You don’t even have to miss out on the action if you take the time to activate any incoming platform notifications on your phone.

    The Bottom Line

    What attracts part-timers to the forex market is its unique 24-hour approach to operation, enabling people to look for profitable trading opportunities at any time of day, regardless of their geographical location. However, it is precisely this characteristic that makes the market so volatile, with potential changes occurring in tiny timeframes easily overlooked by the part-time trader.

    Implementing useful strategies attuned to your operating hours, in addition to active market elements at your time of trade, makes it possible to achieve long-term trading growth in the forex field. Making it a point to focus on long-term trends and holding on to trades for longer helps the part-timer curb major losses and maintain control over their portfolio.

    Managing Risk in an Upside Down World

    Risk accompanies every trading transaction, but that doesn’t mean that there aren’t ways to safeguard yourself against it. This starts by educating yourself on the basics of trading, and truly understanding the underlying principles of forex.

    With a strong plan in place, you can also use stop losses, have realistic expectations on what you can achieve, and avoid risking excessively to the point of no recuperation. You can use take profits to close off trades when they hit an optimum profit level, and avoid excessive use of emotions. Diversifying and maintaining your forex portfolio does not have to mean reckless risk-taking.

    Forex Trading Course

    Whether you’re interested in exploring the possibility of a new career, or looking into seriously expanding your business with trading, you want to look for a comprehensive course that delivers all the crucial forex information you need, with no misleading shortcuts. Most courses with this subject matter tend to be highly diluted, dishing out generic information in vast quantities for a quick profit. The truth of the matter is, not many parties will have the student’s best interest at heart, leaving the curious learner at a loss for quality information sources. So, what does the aspiring trader do?

    G7FX Courses

    G7FX’s founder Nirav has gone to many lengths to concentrate his 16 years of trained experience in the forex field into the best educational experience out there. Informed by his many years working with leading forex companies, Nirav accomplished his long-term vision of delivering actionable and valuable training to new students.

    He has levelled the playing field for those willing to enter the forex sector, providing them with razor-sharp skills needed for the fast-paced world of trading. The course’s logical, streamlined system, coupled with easily digestible modules, are within the capabilities of even the most novice trader. No prerequisites are required, giving you the chance to hone your skills and your confidence as you grow over time.

    Contact the Forex Trading Strategies Specialists

    If a world-class education in forex trading is a dream of yours, sign up for our courses today. Our impressive track record speaks for us, with thousands of students transforming into seasoned forex traders despite having no previous knowledge in the field. Our proven teaching system covers all the basics, free of misconceptions or futile shortcuts, guaranteeing you your money’s worth and your satisfaction.

    You can now learn the secrets of the trade with strategies used by global forex leaders every day on the job. Sign up for either the Foundation or Pro course, and send an email to Nirav himself if you’re having doubts or questions. He’d be more than happy to allocate time in his schedule outside active trading hours, to give you the support you’re looking for. Become one of our success stories, and tackle a new career path with unlimited opportunities for growth, self-sufficiency, and confidence!