FinanceForex

Best Trading Strategy to Earn a Living in 2022

Best Trading Strategy to Earn a Living in 2022

you can earn a living through trading, using online trading platforms. The most important thing to remember is that you need to find a strategy that fits your specific trading style. The way to get the most accurate entries is to try to find the trend by looking at the various highs and lows.

A platform that helps with that is the Bitcoin Equalizer platform. With this platform, you should be able to learn day trading and implement other trading strategies effectively.

Most Profitable Forex Trading Strategies

Price Action Trading

Price action trading involves the study of historical prices to formulate technical trading strategies. Price action can be used as a stand-alone technique or in conjunction with an indicator. Fundamentals are seldom used; however, it is not unheard of to incorporate economic events as a substantiating factor. Several other strategies fall within the price action bracket as outlined above.

Length of Trade:

Price action trading can be utilized over varying periods – long, medium and short-term. The ability to use multiple time frames for analysis makes price action trading valued by many traders.

Within price action, there is range, trend, day, scalping, swing, and position trading. These strategies adhere to different forms of trading requirements

Range Trading Strategy

Range trading includes identifying support and resistance points whereby traders will place trades around these key levels. This strategy works well in the market without significant volatility and no discernible trend. Technical analysis is the primary tool used with this strategy.

Length of trade:

There is no set length per trade as range-bound strategies can work for any time frame. Managing risk is an integral part of this method as breakouts can occur. Consequently, a range trader would like to close any current range-bound positions.

Entry/Exit points:

Oscillators are most commonly used as timing tools. Relative Strength Index (RSI), Commodity Channel Index (CCI), and stochastics are a few of the more popular oscillators. Price action is sometimes used in conjunction with oscillators to further validate range-bound signals or breakouts.

Trend Trading Strategy

Trend trading is a simple forex strategy used by many traders of all experience levels. Trend trading attempts to yield positive returns by exploiting a market’s directional momentum.

Length of trade:

Trend trading generally takes place over the medium to long-term time horizon as trends themselves fluctuate in length. As with price action, multiple time frame analysis can be adopted in trend trading.

Day Trading Strategy

Day trading is a strategy designed to trade financial instruments within the same trading day. That is, all positions are closed before the market close. This can be a single trade or multiple trades throughout the day.

Length of trade:

Trade times range from very short-term (matter of minutes) or short-term (hours), as long as the trade is opened and closed within the trading day.

Forex Scalping Strategy

Scalping in forex is a common term used to describe the process of taking small profits frequently. This is achieved by opening and closing multiple positions throughout the day. This can be done manually or via an algorithm that uses predefined guidelines as to when/where to enter and exit positions. The most liquid forex pairs are preferred as spreads are generally tighter, making the short-term nature of the strategy fitting.

Length of Trade:

Scalping entails short-term trades with minimal return, usually operating on smaller time frame charts (30 min – 1min).

Entry/Exit Points:

Like most technical strategies, identifying the trend is step 1. Many scalpers use indicators such as the moving average to verify the trend. Using these key levels of the trend on longer time frames allows the trader to see the bigger picture. These levels will create support and resistance bands. Scalping within this band can then be attempted on smaller time frames using oscillators such as the RSI. Stops are placed a few pips away to avoid large movements against the trade. The MACD indicator is another useful tool that can be exercised by the trader to enter/exit trades.

Swing Trading

Swing trading is a speculative strategy whereby traders look to take advantage of rang bound as well as trending markets. By picking ‘tops’ and ‘bottoms’, traders can enter long and short positions accordingly.

Length of Trade:

Swing trades are considered medium-term as positions are generally held anywhere between a few hours to a few days. Longer-term trends are favored as traders can capitalize on the trend at multiple points along with the trend.

Entry/Exit Points:

Much like the range-bound strategy, oscillators and indicators can be used to select optimal entry/exit positions and times. The only difference is that swing trading applies to both trending and range-bound markets.

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