“Every battle is won or lost before it’s ever fought” – Sun Tzu
The global Forex market is the biggest, most liquid, fiscal market in the world with about US $2,000 billion traded per day, five days a week. It is also a fast-paced, compelling market to invest in. Prices change quickly in small increments, allowing the Forex trader to profit by trading on these price moves.
The rise of the World Wide Web and the digitally-connected society has changed the Forex trading industry from an environment that was dominated by central banks, financial institutions, hedge funds, and the notably moneyed individuals to a place where the ordinary investor can buy and sell different currencies directly through online brokers’ websites like ours at Jones Mutual.
There are several reasons why it is vital to utilise legitimate, tried and tested, investment strategies to trade on the Forex market. The main reason being that currencies often change during a trading day, leading to a high exposure to risk. To echo Sun Tzu’s thoughts in the quotation mentioned above, if you do not carefully and thoroughly plan your trade, you stand a very high chance of losing more than your initial investment.
Furthermore, there are many different trading strategies for you to choose from. However, the best approach for you to use will depend on your personality. In other words, different strategies suit different personality types.
Therefore, in the spirit of this critical topic, we at Jones Mutual have selected our top Forex trading strategies to help you get started:
This is a short-term trading tactic which ensures that you open and close your trading position within a single trading day. The advantage of using this strategy is that you do not expose yourself to the overnight market movements. Also, you have to watch your trades. You cannot leave them to ride out the small market movements. It is worth noting that the shorter the trading timeframe, the higher the exposure to risk.
Scalping is a short-term investment technique that the investor uses to make a sizeable profit by placing a large number of small trades. It stands to reason that the smaller value you place on an individual trade, the less your exposure to risk is. The low risk levels are counterbalanced by the short trading times which increase the exposure to risk.
Positional trading is a long-term trading strategy and is used to ride out the small price movements in the Forex market. It aims to derive as much profit as it can from the significant price shifts.
Jones Mutual offer Forex trading through contract for difference (CFD) on currency and cryptocurrency pairs.
Start CFD Trading with Jones Mutual Today!