Trading Strategy: Forex Volatility Trading: Currency Trading

Forex trading revolves around currency trading. The value of the currency can rise and fall as a result of different factors that include economics and geopolitics. The changes in the currency value factor in the profits for Forex traders. And this is the main objective of getting into the trade. Trading strategies determine whether traders should buy or sell currency pairs at any given period of time.

According to Charles Schwab, these strategies can be technical analysis charting tools based or news based. There are multiple signals that trigger the decisions whether to buy or sell the currency.

The strategies can be automated or manual:

 Manual systems require a trader to sit and look for signals and interpret them to make buy/sell decisions.

The most important thing would be for the trader to decide what strategy matches the kind of trading experience they wish to have and what strategies offer the best signals for interpretation so the best trading moves can be taken. Below are some of the top strategies most traders use and some you should consider if you are a beginner in the markets.

Forex Volatility Trading Strategy:

The Forex market can be volatile, meaning that the prices can make very sharp jumps. Volatility systems are created to take advantage of the price actions and are usually best for short term and quick trades. The systems are also based on volatility increase and whereas their winning percentage of trades may be higher, the profits earned per trade can be comparatively low. This strategy is best for traders and investors who understand the volatility perception.

Forex Trend Following Trading Strategy:

These strategies use market trend marketing to guide traders towards their long term trading goals. Moving average, current market price calculation, and channel breakouts are commonly used to generate signals and decide the best market direction to take. Instead of predicting or forecasting prices, traders using these strategies only follow the market

When using the scalping strategies of trading, the profits are usually anywhere between 5 to 10 pips for each trade. These strategies require constant Forex market analysis and the trader also need to place multiple trades at once. They can be pretty demanding and traders need to be relatively fast in predicting where the markets are headed so they can open and close positions in the shortest time possible.

Forex Pivot Point Trading Strategy:

Pivots make it possible to identify entry points, especially for the range-bound trader. These points are also helpful to breakout traders and trend traders in spotting key points that need breaking for given trading move so they qualify as a breakout. Traders who understand pivot and calculations around it will find these strategies quite helpful in trading currencies. It is important to remember that calculating pivot using closing prices of the short time frame reduces significance and accuracy of the point of rotation. The calculations need to be precise because they make the Forex market backbone.

Forex Chart Pattern Trading Strategy (Personally my favorite of all Trading