Forex trading is way more profitable than anything. There are many simple forex trading strategies which can be used for profitable Forex trading. Strategies should be well planned and they should be in alignment with our goal for which we are trading. What people generally do is they do complicated procedures and then they follow the very strict regime for the same which is not bad but it is very time consuming and sometimes as the market is unpredictable so the planned regime also gets clumsy to follow so for because of this some set of planned strategies can be followed. Some strategies are being listed here which can be followed for the convenience.
1. Risk management
2. Target the pips
3. Reward to risk ratio
1. Risk Management- Risk management is a strategy which is an effective strategy. As risk management Is a crucial factor. The trader wants to get more benefited by a single trade only. Traders want to squeeze more profit out of one trade only. So this way they extend their risk. Extending risk is not an issue but no proper hedging of risk takes to the trader which put their position on the very big risk. In forex trading, traders get high leverage. And this leverage is already a risk on their capital and contrary they extend risk more due to not having proper risk management. So managing the risk is an important strategy to follow. There are some strategies for risk management which can be followed by traders to trade in forex.-
(a) Count every single Pip- When we trade in forex the profit is in PIP. Generally, traders target big PIPS and this keeps their capital at the stake. Traders should not ignore the value of every single pip. The profits can be earned in very small pips also of course as per the currency in which we have entered into trading.-
(b)Forex Spot rate- In forex Trading, we trade in minimum two currencies one is base currency and another one is quote currency. The currency which we are purchasing is quote currency and against of which currency we are purchasing that is base currency. The price at which we enter into the contract for currency is executed that particular price is Spot rate. The risk can be managed by using spot rate to determine the spot rate between the currencies of your trading account and quote currency.-
(c) Difference between Stop Loss and Cost- The difference between the stop loss and cost can be used to risk management. Difference between the Stop loss and cost is a very big factor if this difference is managed properly then it is a very effective way to manage the risk.
2. Target the Pips- Generally, traders target the pips which are very hard to get and very risky. Targeting the pips which are not achievable is very disheartening and as well risking the capital for no good reason. So the traders should target the pips which are realistic. Targeting on the basis of expectations and out of desire which has no connection with reality. It means that traders are expecting that they should get mango from the tree of apples.
3. Reward to risk ratio- Reward to risk ratio is again an efficient strategy to follow. If for the small reward we are risking our big capital then it is not a good thing to follow. The reward to risk ratio should be in the favor of our trading style it should never be contradictory otherwise it will lead to going all the efforts in the vain.
Conclusion – Simple forex trading strategies that work is about trading strategies which can be followed by any trader for better profits. Always remember a planned shot with small steps is always better than the massive shot with no planning as in the planned one there is some scope for improvements but in massive one, there is no way we can understand what to do next. So try to follow the strategies for winning outcomes.
Winning not only means to earn but earning an experience is itself a reward which can be done with planned moves unplanned are not even justifiable.