Top 5 Forex Strategies to Boost Your Trading Success11 min read

Top 5 Forex Strategies to Boost Your Trading Success11 min read

It is quite possible to increase your earnings in the market with the right forex strategies. The foreign exchange market, or forex market, offers investors the opportunity to benefit from fluctuating currency values daily.

But it’s often confusing to know where to start when you’re entering this large and unpredictable market for the first time. How do you decide which trading strategy to implement and see the benefit?

Here in this article, we’ll talk about the five most common forex trading techniques and give you some ideas and metaphors on how to put them into practice. 

We want to ensure that you have the confidence to implement these strategies. So let’s get started and become a profitable forex trader!

What are the Most Popular Forex Strategies in the Long Term?

If you’re going to stick it out for the long term, three techniques seem to be winners:

Trend Following

Trend following is based on the fact that markets can continue trending for long periods of time. Basically, you should get on board of a currency pair’s up- or down-trend and go with the flow where it takes you. Traders use charts of several timeframes (such as daily, weekly, monthly) to discover trends. Trends can persist for months or even years.

Carry Trading

This approach takes advantage of intercurrency interest rate differences. You take low yielding currency loans and put it into higher yielding currencies. When the “carry” or interest rate spread is greater than the price, it pays off over time. The most common pairings are extending to the long side on the Aussie against the Yen. Just remember – carry trades are dangerous if volatility goes into overdrive.

Fundamental Analysis

In contrast to the technical interpretation of the historical price movement, fundamental traders also research economic indicators such as growth, inflation, central bank policies, etc. You want to be able to see what fundamentals between countries are improving or worsening so you can have an “advantage”. It takes years of study, but it can anticipate key pivots.

What is Trend Trading, and How Does It Work?

Trend trading is among the most successful forex trading techniques since it enables you to make great returns by following large currency movements that typically last for weeks or months. But how do you actually put it into practice?

It’s like finding a treasure map. To start with, you need to review the charts on different time scales to determine the overall bias, or trend. 

Then you create trendlines, which are lines on the map that show the trend channel boundaries.

Once you have a trend going, your aim is to buy or sell when the price breaks down in the trend. You can take on positions when prices retrace in the channel. 

And you’ll stop when the trend veers off course or your profit level is reached.

After patiently observing trends on the charting version of the treasure map, trend trading can be employed by professional traders to secure long-term gains in the forex industry.

What Tools are Essential for Implementing Forex Strategies?

In the same way that a carpenter needs the right tools, forex traders also need certain tools to actually execute strategies. Here are a few must-haves:

Software For Charting – You’ll need high-level charting software for technical analysis. The most common platforms are MetaTrader 5 and TradingView. Highlights: line trend, multiple timeframes, and indicators. Charts provide the framework.

Trading Platform– A virtual platform where you can make and manage both practice and live trades. High level configurations feature automated strategies, one-click trading, risk management, and so on. Mobile access is also clutch.

Economic Calendar – Knowing the macro data releases in advance helps you anticipate expected responses. Calendars alert you to important developments that often trigger volatility.

News aggregator – Geopolitical developments and comments from the central bank can make or break markets at a glance. A solid news provider keeps you up to date on what drives supply and demand.

Demo Account – Test strategies at no risk prior to investing real money. Demos are your opportunity to test out your method, iron out kinks, and experience with platforms.

Know these basic tools and you’ll be able to execute tactics properly and successfully.

The Most Effective Tool for Implementing Forex Strategies: MetaTrader 5

When it comes to picking software that has it all, MetaTrader 5 is the clear winner. 

Here are a few reasons why it’s still the gold standard:

• Dynamic Charting – MT5 includes 50+ built-in indicators, custom timeframe charts, drawing options and warnings – everything you need for technical analysis.
• Automated Trading – The platform supports development of trading robots, which implement pre-tried strategies. This takes the emotion out of trading.
• Order Entry by Single Click – With direct market access, order entry is simply done via a single click and ensures maximum efficiency. Advanced order types are supported.
• Flexible Platform – The software works both on desktop and via apps, so your charts and positions can be seen from any location.
• Integrity With Brokers – MT5 integrates with hundreds of brokers around the world making account creation and order execution as easy as possible.

With its highly advanced but user-friendly interface, MT5 has become the standard choice for serious traders across the world. 

Whenever you’re looking for the complete package, turn to this industry powerhouse.

Which Online Bank is Best to Open an Account With to Earn with Forex Strategies?

You’ve given yourself access to tools and strategies. You’re ready to create a live trading account – but with all the brokers out there, which one is the right choice?

Once they’ve been screened through, most long-time traders say The Kingdom Bank is one of the best options. 

Here’s why:

• The Kingdom Bank is licensed and supervised, ensuring security and peace of mind. Funds are protected.
• Our service offers direct market access, low spreads and order execution at lightning speeds so that the strategies can be executed easily.
• MetaTrader 5 works well with it and provides powerful yet intuitive charting, automation and trade management tools.
• Highly skilled traders can expand portfolios by adding other assets such as CFDs, stocks and commodities.

If you’re looking for a centralized platform that only exists to empower traders, there is nothing better than The Kingdom Bank’s robust and smooth environment. Take a look at us – you might just discover your new favorite platform.