| May 05, 2021
Different Strategies for Currency Trading in India
strategy is the set of parameters based on back-tested analysis to enter or
exit the currency pair as per the market conditions. Market veterans have
developed a plethora of successful strategies to make consistent profits. There
are a few important characteristics that distinguish a profit yielding strategy
from others. Such a strategy will help in understanding the type of currency to
trade in, the size of each position, the entry and exit points, and relevant
techniques for the execution.
blog, we have compiled several productive strategies that can aid you in making
real profits in the forex markets.
- Candle stick Strategy: This
is one of the simplest yet effective methods to trade currency. In this,
the trader only reads the patterns formed by candlesticks or price action.
This type of strategy works in almost all the market conditions i.e.
trending, range-bound, and even volatile.
- Volume Trading Strategy:
Where there is more buying or selling there is more volume, which means
more pressure or intensity. An easy example of volume trading strategy is
to buy when the prices are moving high with higher volumes and sell when
the prices are moving low with higher volumes. It is recommended to stay
cautious when the volumes are low.
- Multiple Time Frame
Strategy: Analyzing the forex chart on higher time frames and then moving
towards lower time frames is termed as multiple time frame strategy.
- Trend Trading Strategy: The
market always moves in one of the three ways- upward, downward, or
sideways. The only way to make money in the market is to identify and
follow the existing trend. This strategy helps the trader to catch a
trending trade or even get into an existing trade with various indicators
like moving average, stochastic, etc.
- Counter-trend trading
Strategy: This is the opposite of the previous strategy. In this, the
trader tries to capture the top or bottom and take positions accordingly.
This can be extremely profitable or loss-making at the same time.
- Scalping Strategy: A scalper
exploits plenty of minor price changes in a day with quick transactions. A
forex market is the best set-up for scalping as it provides liquidity and
volatility in abundance.
- Range Trading Strategy: This
is one of the safest trading strategies which can be done with relatively
small stop losses and larger targets. This involves trading within a
predictable range of prices by selling at the resistance and buying at the
In order to engage in effective trading within the foreign exchange market, it is essential to carefully assess important elements such as trading opportunities, risk to reward ratio, and the time required to conduct fundamental and technical analysis.
When it comes to forex trading in India, it is crucial to select a trustworthy stock broking firm in India to open your forex trading account. It is recommended to search for features such as easy and convenient account opening, no annual maintenance charges (AMC), lowest brokerage, and a long-standing reputation in the financial market.