All serious traders know that FX trading strategies are at the forefront of their FX trading activity. FX strategies are based on different types of analysis including both fundamental and technical analysis. Each of the mentioned analysis methods is used in a certain way to identify the market trend and make reasonable predictions on future market behaviour. While FX trading is generally regarded as a full-time activity, various traders trade part-time. They either have interests in other forms of trading besides forex or have a full-time job somewhere else.
Regardless of this, even these part-time traders have a nice chance of succeeding in FX trading and netting in a good profit. There are certain strategies for part-time forex traders that you can use, which do not require much technical skill or expert trading knowledge. Some of them are listed below.
1. Range Trading Strategy
Range trading or channel trading can be used by part-time traders when there is no trend present in the market. This strategy helps them to identify FX price movements in channels to find a range. Traders have to connect a series of highs and lows via a horizontal trendline. This strategy works best in a market that has just enough volatility to force the price to remain on the channel and not break out of range. If they break out of this support and resistance range, traders should exit all range-based positions. Stop limit orders can be used when selling and buy a range. Traders should set limit orders down near the support level while selling a range. While buying, they should place take-profit orders at the previously defined resistance level.
2. Trend Trading Strategy
Unlike stock markets, FX markets do not move in straight lines. They move in a series of zig-zags which can resemble successive waves. Clear peaks and troughs are formed, which are known as highs and lows. Trends represent one of the most essential concepts of technical analysis in FX. The movement of peaks and troughs determines the type of trend in the market. There are three types of trends namely, sideways, downtrends, and uptrends. Traders can either go long or buy, go short or sell or stay aside.
3. Volume Trading Strategy
Assessing the health of a trend based on volume activity is a part of volume trading. It is one of the oldest day trading techniques in the market, used across several markets including FX. The Volume indicator is one of the most popular indicators used in technical analysis as well. Traders have to look at the trading volume bars usually present at the bottom of the chart to determine the upward or downward movement of the volume. If a relatively high volume accompanies a price movement, the movie is of more significance to traders. Traders can also use trends and volume together. If prices are trending higher, it’s usually an indication that there is more buying than selling pressure. If volume starts to decrease during an uptrend, it means that the upward trend is about to end.
4. Taking fewer positions and holding for days
After you’ve selected a certain currency pair to trade, you must take to time to understand what forces drive their values. After conducting research and studying the market, narrow down your choices. After this, proceed to select a few positions and hold them for a longer period. This can prove to be a prudent strategy for part-time FX traders. You can also additionally put in a stop-loss order with all the trade you place. This way your losses are minimized if the market moves against your positions.
Part-time forex traders are generally casual traders that have other commitments stopping them from focusing on FX trading full-time. The above strategies are just some of the easiest they can use to succeed in forex trading. Alternatively, they can make use of various automated forex software programs called forex robots or expert advisors. They are ideal for individuals interested in trading FX but don’t have the knowledge or time to it by themselves.