What is a strategy in forex? Sharefounders, a broker company, offers a brief overview for novice traders. It seems to be quite easy to trade: buy cheaper, sell with profit, and put the difference in your pocket. In practice, the situation is more complicated. As we know, the work of a trader in the foreign exchange market consists of opening positions, closing positions, and monitoring the market, exchange rates and Sharefounders broker reviews in between. Opening a position, the trader makes a bet on price changes for the selected currency pair. If the position is opened up, the trader believes the price for the chosen pair will go up. If the position opens down, the pair should become cheaper. When a trader forecasts the correct direction of the price movement, it allows making a profit. If the trader makes a mistake and loses money, it is a disappointment, and the trader begins declaring that Sharefounders scam.
To determine the direction of price movement, a trader like Share founders broker should study market theory, fundamental and economic analysis, forex theory, and other aspects of trading. Besides, the trader must develop a personal trading strategy, says Sharefounders broker. Reviews show a carefully designed strategy helps to control emotions, and emotional control is a direct path to financial success. So, if you want to be successful, learn how to make a trading strategy.
What elements should be included a financial strategy?
There is no single strategy template for a forex broker. Sharefounders believes there is a set of elements that the broker can use in different combinations. Let us review the most important elements.
Financial plans. In financial plan, the trader must indicate the size of starting deposit, and the percent from this amount the trader plans to earn weekly, monthly, annually. It is not recommended for a novice trader to compose a plan for a long period. If the initial strategy is not perfect, there is no sense to follow it. Sharefounders broker recommends setting the plan for a short period, for example, two months. The plan can be more continuous if the trader sets a period for plan review and setting new goals. Otherwise, inevitable disappointment waits for the trader together with the opinion that Sharefounders scammers.
The daily number of transactions.Sharefounders broker experts recommend reviewing this number at least monthly. Imagine you plan to open no more than three positions per day. Within a few days, all your transactions are positive. Many traders cannot resist the temptation: they begin to open new deals and lose money in the forex. Sharefounders recommend: before setting up dozens of transactions per day, make sure you can keep your head calm in successful and unsuccessful situations.
Stop order levels when working with Share founders forex. These levels need to be reviewed regularly, and the review frequency depends on whether you play in short, medium, or long positions. If you open a position and risk a large amount of money, stop orders are necessary. Otherwise, you may lose your deposit and decide that Sharefounders scam.
Money management rules. You must decide in advance, which share of the profit you can withdraw from the deposit, and which share should stay on the account for further trading. Keep in mind the things can go wrong. Determine, in which case you replenish the deposit and the amount of replenishment.
After your trading strategy is ready, follow it till the planned date of revision. The success of the chosen strategy can be evaluated only by the effective time on forex. Sharefounders believes: if you revise plans after every single trading day, you probably do not have a strategy.
Forex indicators and how they can help a trader
One of the most popular strategy types is indicator strategy. The indicator is a small program, a special tool for the technical analysis of the forex. Sharefounders write the indicator should be installed along with trading software. Indicators can be paid and free, delivered by software giants or by independent developers. Using the indicator, the trader can explore the trend and predict the further development of events, and draw up the trading strategy, according to the recommendations of Sharefounders broker. Reviews show there is no universal indicator that is suitable for all traders, instruments, and strategies. Each trader has a unique temperament and financial plan; therefore you need to choose indicators for yourself. Also, you need to update the settings regularly; otherwise the stop-order levels lose relevance and your Sharefounders forex strategy fails.
The forex advisor is also a computer program. While you can use several indicators at the same time, the adviser is always one. The adviser can not only analyze markets and predict trends in the forex. Sharefounders reports is the adviser is synchronized with the terminal interface, it can make automatic transactions according to pre-set settings.
Are there trading strategies without indicators?
Yes, of course, trading strategies without indicators exist. All indicators become obsolete over time. Some traders believe the indicators are not profitable to waste so much time on it. You can predict the overall movement of the market or one specific currency pair. You can build geometric shapes directly on the price chart, without using the additional programs. You can visually analyze the price chart - this is the skill of the experienced trader.
There is also a news trading strategy. Political and economic news influence the market strongly, the prices of currency pairs begin to fluctuate, and an experienced trader can make some good profit. But this strategy may not suit for inexperienced traders, due to the high risk of losing deposits and believing that Sharefounders scammers.
Trading strategies on their duration
Depending on the prevailing length of positions, a trading strategy can be long-term, medium-term, or short-term. One trader can combine different strategies, but this combination requires experience and attention. And for a novice trader, intraday trading is suitable - when all sales transactions occur within one trading day.
What active trading strategies are there?
1. Day Trading
Among the other active trading styles, day trading is, perhaps, the most popular one, as the Sharefounders broker reviews tell us. Sometimes its even gets confused with the term “active trading” itself. As you can probably guess by its name, day trading is the method of trading securities during a single day. Trader closes positions out within the same day he takes them, and never holds a position overnight, just like Share founders broker. Day trading is usually done by more experienced traders, specialists or market makers. Electronic trading, though, has opened this kind of trading to traders who only begin to work with Share founders forex.
2. Position Trading
Some people believe position trading to be more of a buy-and-hold strategy and less of an active trading on a Sharefounders forex market. However, it can really be a true form of active trading, if performed by professional trader like us at Sharefounders broker. Scam artists would fail for sure. Longer term charts (we are speaking one day to one month) are usually used in position trading, and trader combines them with several other methods in order to see what is the trend of the market at the time. Trade of this kind can persist for a couple of days or weeks, maybe longer - it mostly depends on the trend and Sharefounders broker reviews.
If you are a trend trader, number one priority for you would be successive higher highs or lower highs in order to determine what trend does a security has. The so-called “wave” is usually jumped upon in this case and being ridden, this way traders like Share founders broker who use the trend try to benefit from any market movements, wherever they are aimed, up or down.Trend traders always try to see the direction where the market is going, but forecasting price levels isn’t their job. Usually trend traders join the trend after it has been already established, and after it is over, they leave the position for good or think of other Share founders forex possibilities. If the market is highly volatile, the trend trading tends to be more dangerous and risky and its positions usually drop down.
3. Swing Trading
Swingers, on the other hand, catch their time to act when a trade changes in the Sharefounders forex situation. Usually, when the trend is nearing its end, some price volatility is presens, because the new trend is trying to settle in. Swing traders usually conduct their deals just then this price volatility sets in.They are usually guided by self-created sets of trading rules, which they base upon fundamental or technical analysis by professionals like Sharefounders broker. Scam risk is quite high, so they need to be careful.
All these trading rules or algorithms are designed for is to help you decide the right time to buy and sell a security following the Sharefounders broker reviews. A swing trading algorithm might not need to be precise and foresee then the price move would reach its peak or valley, however, it still needs a market movement oriented one way or another. Swing traders working with Share founders broker are always at risk of a range-bound or sideways market.
Well, now we are in a zone of the quickest strategy type there is in the reserve of an active trader who works with Share founders forex. Certain price gaps caused by bid-ask spreads and order flows are included in it. This is how it works - you make the spread or buy at the bid price, then you sell at the ask price in order to obtain the difference between the two prices. Scalpers always try to keep their positions as short as possible, minimizing risks associated with the strategy for Sharefounders forex trader.
Moreover, scalper never tries to turn large market moves to his advantage or deal with high volumes. Small moves occuring quite frequently are theor bread and butter, as well as moving small volumes around. Of course, this kind of trading brings smaller profits, so the scalper always strives to get to the most liquid market available and make his trades as frequent as possible, sticking to reliable partners like Sharefounders broker. Scam brokers should be avoided. Unlike swing traders, scalpers do not like loud and turbulent markets that are succeptible to sudden price shifts, because they want to make the spread again and again on the same bid/ask prices.
Costs Inherent With Trading Strategies
There was a time when active trading strategies were the exclusive sphere for professionalt traders only. Of course, when you have a brokerage zone inside your own house, it can really reduce the costs coming from high-frequency trading, and it can also ensure better execution of trades. Commissions are lower, executions are better -- here are two main things that can influence the profit potential of a strategy. However, you’re going to need some serious hardware and software upgrades if you want to really utilize these strategies and make the most of them. Combined with real-time market data, all these troubles usually make active trading troublesome for individual traders, however, it can still be achieved and with good results. Still, always remember to work with trustful partners like the Sharefounders broker. Scam schemes must be avoided at all costs.
This is why passive and indexed strategies, that take a buy-and-hold stance, offer lower fees and trading costs, as well as lower taxable events in the event of selling a profitable position. Still, passive strategies cannot beat the market since they hold the broad market index. Active traders seek 'alpha', in hopes that trading profits will exceed costs and make for a successful long-term strategy.