New traders are continuing to take great interest in Forex trading.
The forex market is one of the most popular and liquid entities of its type in the world, now being estimated as a multi-trillion pound industry.
However, this market is notoriously volatile and difficult for beginners to navigate, with most newbies advised to “trade with the trend” and identify the underlying factors that govern change in the forex market.
More specific trading strategies are required to achieve success as a forex trader, however, the bulk of which can be honed and refined whilst using a forex demo account.
In this post, we’ll consider three ideal trading strategies for beginners, whilst asking why they’re suited to individuals with little or no experience of the forex market.
The Pin Bar Trading Strategy
We start with the pin bar trading strategy, which is arguably the single most popular option for investors who are new to forex. The reason for this is simple; as it features a visually obvious pattern that’s easy to identify on a trading chart.
It’s also relatively simple to trade over time, as it’s built on the principle that bearish markets often meet resistance at some point before breaking through this to achieve subsequent price gains. The pin bar represents the point of resistance, which subsequently becomes bullish as the market grows and finds new momentum.
With this strategy, you can track the price movements of a particular asset and identify the best times to buy, sell and trade accordingly.
The Inside Bar Trading Strategy
Next up is the ‘inside bar trading strategy’, which is highly effective and relatively easy for beginners to follow. Unlike the pin bar alternative, this strategy is best deployed as part of a continuous trading pattern, which means that you should always use a pending order to trade a breakout in the direction of a major and previously identified trend.
This strategy is particularly effective during the so-called consolidation or resistance period in trades, as it enables traders to hold their nerve and wait for the continuation of a strong upward trend.
The Forex Breakout Strategy
You’ve probably heard of this strategy, which is one of the best known in the forex marketplace in the digital age. However, it’s slightly more complex than the other options on our list, so you’ll need to think carefully as a beginner before adopting it.
With this strategy, you’re essentially waiting for a market pullback and retest before entering, rather than trading the actual break of a level.
You should only typically be interested in breakouts that occur from a wedge pattern than a horizontal level, but in truth you’ll have to tailor the strategy to suit your own trading patterns and philosophy.