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Free Forex Strategies - A Basic Guide

Forex trading is a niche territory. It requires an understanding of the market trends, knowledge about investment laws and, above all, the ability to time entry and exit. While the market is not as complicated as it may sound, it certainly calls for sound trading decisions to make profits. Free forex strategies are some of the industry secrets which will help you to increase profit margins, while playing safe.

Free Forex Strategies To Get You Started

Here are some of the free forex strategies that have worked for several traders:

Purchasing on margin: Here, the trader suffers from significant amount of risk. However, it also opens the door to major profits. When purchasing on margins, the broker offers leverage to the trader. This allows the trader to invest more than the real worth of his account. Considering the risk factors involved here, the trader should have expertise in timing entry and exit to remain profitable.

Stop Loss Order: Here, the trader predefines the price level for the currency pair which is not expected to stay open. This strategy helps to trade profitably while limiting the possibility of losses.

Rely on Simple Moving Average: Also known as SMA, Simple Moving Average is the mean exchange value of a currency pair over a period of time. Considering SMA for any currency pair gives a rough idea of the buying and selling parameters. Most trading platforms generate SMA automatically to assist the traders with investing decisions.

Range trading: Although it is a time-taking procedure, analyzing historical levels helps to reduce risks to a great extent. Levels are the extreme values within which the currency pair has moved in a given period of time. Understanding levels reduces the risk, but also reduces the probability of significant profits. Levels are usually for those investors who want to play safe.

Managed account: This strategy is meant for those individuals who want to invest, and not trade, in the currency market. This arrangement works similar to the mutual fund industry. You invest money in the currency market and allow a professional trader to trade with your money. While it reduces the profit margin, your money can work well under the umbrella of an experienced trader.

Free forex strategies are not a sure-shot route to profits. They are highly useful to learn smart trading during the initial years. However, as traders gain experience, they tend to develop individual tricks that work for them. Following popular trading strategies is especially useful in volatile market situations.




Source by Kitz S

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