Forex market has countless advantages, whether it is a huge liquidity with low transaction costs or margin requirements
Two basic Forex strategy
Forex market has countless advantages, whether it is a huge liquidity with low transaction costs or margin requirements. Forex is a market that never stop and opens up opportunities for different approaches and strategies. However, the basic general strategies are two, this forex strategies are: consolidation and trend strategies. We can not say which one is better, because each one fits in a different period, and we can simply say that it is an opposite.
FOREX Trading of consolidations
Consolidation trading is characterized by a regular movement between support and resistance over a longer period of time. There are no higher peaks and higher bottoms or lower peaks and lower bottoms, but the market is gripped in a “rectangular formation”. Bulls buy on support and bears sell for resistance. The goal of this strategy is ideally to get to know as quickly as possible that the market has been consolidating and identifying consolidation points, and to use it for entry into the position. This approach has a very interesting relationship between risk and potential profit.
FOREX Trend trading
The second major strategy is, of course, trend trading. In this case, the trader must first correctly recognize the current trend and then find the ideal entry point. Trending trading is probably the most popular of all possible approaches.