Top Five Most Popular Trading Strategies

09 / 02 / 2017 | General
Deciding which forex trading strategy to use can seem like herculean task; there are multiple free options, off-the-shelf solutions, automated and even paid platforms at your disposal. In this article we will look at some of the most popular options and what they offer, giving you the insight to trade efficiently. Although some might question the efficacy of trading strategies, it can help you the trader maintain a specific path resulting in more consistent results.Ultimately a forex strategy should help you avoid losses, give you a target in regards to profit and signs when to exit a trade. Here is the list of five of the most popular forex strategies.

5. Day Trading 

All of your trading is finished by the end of the day, this helps negate the chance of being effected by movement overnight. Also called intraday trading, it involves closely watching the markets and closing any trades you have opened by the end of the day. Although a riskier strategy, it attempts to negate losses, by assuming that market fluctuation will not be substantial in the duration of a day. This can be a fast-paced and exciting way of trading, if not a riskier one than others.

4. Fibonacci Fx Trading Strategy 

Based on the Fibonacci retracements of technical analyses, it essentially analyzes the movement of currency against a trendline and its deviation from that in intervals of the Fibonacci sequence i.e. 23.6%, 38.2%, 50%, 61.8% and 100%. This can help the trader identify patterns and hopefully predict or forecast beneficial trades.

3. Scalping 

Although scalping in the popular lexicon usually carries negative connotations, in forex trading lingo, it refers to making multiple trades and taking advantage of many small profits instead of going after a “white whale” of a trade that makes you a large profit. When using a forex scalping strategy you can expect gains in the range of 5-10 pips/trade and using leverage can increase losses but bolster profits too.

2. Range Trading 

In essence, range trading is the time-tested and time-honored trading strategy of: buy low, sell high. When a currency pair is low you purchase and wait until it increases. This strategy is widely used and popular not only for its immediacy but also for its ease of use. Of course this strategy requires the frequently mentioned discipline to exit when the time is right.

1. Trend Following Strategies 

This is a strategy that is implemented by both new and experienced traders and as the name indicates it concentrates on general movement of prices, either upwards or downwards. The reason this is such a staple of foreign exchange trading strategies is simply because it takes advantage of trends. Due to its straightforward nature, it is exceptionally simple to use and very new-trader friendly.
Many analysts say that a trend following trading strategy can cover gaps in a flawed strategy and this makes sense, considering you are hitching your proverbial wagon to a currency that is experiencing upward swing.
Now that you are familiar with some of the most popular trading strategies, which will you use? Try your strategy Try your trading strategy on MT4 platform with a risk-free STO Demo Account, which includes a virtual starting balance of 50,000 USD and the ability to trade on any device, anywhere. 

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64.62% of retail investor accounts lose money when trading CFDs with AFX Capital Markets Ltd. 62.75% of retail investor accounts lose money when trading CFDs with AFX Markets Ltd. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.