Strategies For Trading Forex In South Africa

Forex Trading Strategies For Students

Forex trading simply means to buy and sell currency pairs using an application that gets downloaded into your computer. You can also trade via a broker’s website if you did not download the trading platform.

For those who have travelled abroad, you might have noticed that international airports have a counter where travelers exchange their money for notes of countries they are traveling to. This is actual forex trading but in a manual forms. Even if you may not be aware but whenever you do this, you have just participated in the forex trading market.

But this is not how forex is traded lately. Forex traders do not have to go to the airport or whatsoever. You can trade foreign currencies right at your place of choice.

The biggest stock market in the world, which is the New York Stock Exchange, trades a volume of about $22.4 billion each day. Forex is traded daily or even hourly. This means that you can simply enter the market at 10:00, make profit and then exit the market at 11:00. Depending on what you are trading and what your margins are, you could make R100 000 in just an hour.

Forex Trading Strategies

There are strategies that are adopted by experienced traders to make profit online. We are going to discuss just a few.

Swing trading

Positions held for several days, looking to profit from short-term price patterns. A swing trader might typically look at with bars showing every half hour or hour.

Day trading strategy

Here traded positions are closed before the end of the day, as the name suggests. This removes the chance of having positions that work against you while you sleep. No positions are left overnight. Trades may last only a few hours and price bars on charts might typically be set to one or two minutes.

Scalping strategy

These are very short-lived trades, possibly held just for just a few minutes. A scalper seeks to quickly beat the bid/offer spread and skim just a few points of profit before closing. Typically uses tick charts, such as the ones that can be found in MetaTrader 4 Supreme Edition.

Positional trading strategy

Long-term trend following, seeking to maximise profit from major shifts in prices. A long-term trader would typically look at the end of day charts.

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