Before now, currency trading—popularly known as forex trading—used to be the domain of large financial institutions, banks, and multinational corporations. Today, with the internet and advancements in technology, anyone can learn how to make money in the forex market.
On a daily basis, there are new traders making inroads into the forex market. That means for you to know how to make money in the forex market, you must be more equipped and battle-ready than those who are already in the forex market or the new entrants.
If you are asking if you can truly know how to make money in the forex market, the answer will be a resounding YES! This is why we will be recommending strategies that will help you to know how to make money in the forex market.
- Day Trading
For this strategy, all the positions of trade are traded on the same day. Why should you adopt day trading? The trading positions are not affected by the price fluctuations that might have occurred overnight. As a day trader, you are always active and alert to make transactions during the trade period.
If you have a 9 to 5 day job, you can adopt day trading to work with your schedule. Day trading is quite accessible to anyone regardless of their schedule. Being a day trader, you can adopt scalping where you target small profits immediately after the trade opens.
- Momentum Trading
To adopt this strategy, you must have ample knowledge of technical indicators. This strategy requires you to be able to identify the best entry point, relying on price action analysis. You are then obliged to adopt another strategy to measure the market momentum, such as the Moving Average Convergence Divergence.
This strategy is about going with the flow if you are able to identify the momentum and direction of the market. For you to make money in the forex market using the momentum trading strategy, you have to be technically sound.
- Swing Trading
This is more like buying low and selling high. This also relies on technical analysis to determine the overbought and oversold levels to point out the exchange rate that is either priced high or low. This will also involve a technical ability to put in place to stop loss or take profit orders.
To be a swing trader, your positions need to be kept open for more than a single day. Traders often prefer swing trading as it allows for profiting from both trends and countertrend corrections.
- Trend Trading
This is a popular strategy for forex trading. If you are in forex trading for the long haul with the interest of learning how to make money in the forex market, then trend trading must be on your list to know. As a trend trader, you will be guided by the maxim; the trend is your friend.
Of course, a trend trader relies on technical analysis to draw trend lines based on sequences of highs and lows. You must be able to identify underlying trends and keep an eye on the chart patterns.