This article will look at Forex trading for beginners. Moreover, it will introduce some simple Forex trading strategies.
In particular, this piece will guide you all through key Forex trading strategies that beginners can use.
Before anything else, let us know first the definition of trading strategy and how it is processed.
What Is A Trading Strategy?
A trading strategy in finance is the approach of buying and selling in markets. It is based on predefined rules applied to make trading decisions.
Understanding Trading Strategies
A trading strategy comprises of a well-considered investing and trading plan. It is the one that identifies investing objectives, risk tolerance, time horizon along with tax implications.
Meanwhile, some ideas and best practices are in need to be researched and implemented then followed to.
Development for the trading strategy incorporates expanding methods. The techniques include buying or selling stocks, bonds, ETFs or further investments and may widen to additional complex trades such as options or futures.
On the other side, placing trades implies working with a broker or broker-dealer.
In addition, it is also pinpointing and overseeing trading costs comprising spreads, commissions, and fees.
Once the trading is on execution, trading positions are being examined and managed, as well as adjusting or closing them as needed.
However, risk and return are also on measure along with the portfolio impacts of trades.
The longer-term tax outcomes of trading are a major factor. They may further encompass capital gains or tax-loss gathering strategies to offset gains with losses.
Moreover, the Forex market has hundreds of various trading strategies. Want to be aware of what are the best Forex trading strategies for beginners? First things first – what is a trend?
Understanding A Trend
Basically, a trend is the tendency for the market to remain moving in a given general direction.
A trend-following scheme efforts to produce buy and sell signals. These are the ones that align with the establishment of new trends.
There are several methods designed to distinguish when a trend starts and ends. Many of the simple Forex trading strategies that operate have similar methods.
To add, trend following can generate significant profits.
In fact, there are traders who have yielded outstanding track records making use of such systems.
On the other side, there are also some shortcomings to these strategies.
Below you will find out the disadvantages of utilizing such strategies:
They are tricky to stick with
Huge trends can be infrequent
The conditions that denote the potential beginning of a trend, are not frequent.
Three Beginner Forex Trading Strategies
The initial two strategies we will show you are relatively similar. It is for that reason that they make attempts to follow trends.
However, the third strategy attempts to turn a profit from interest rate differentials, rather than market direction.
A breakout is any price movement outside a specified support or resistance area. The breakout can take place at a horizontal level or a diagonal level. The position is depending on the price action pattern.
Is Breakout Trading Profitable?
You can have vast profit potential if the breakout happens to the upside. It is for that reason that you got it at a way better price than anyone who purchased at the breakout price. Since you’re buying the lowest of the range your stop loss can be positioned just below your entry, so the risk is minimal.
Moving Average Crossover
Moving averages are one of the most commonly managed technical indicators in the forex market. They have turned out to be an essential part of many trading strategies. It is because they’re simple to use and apply.
The two main types of moving averages are:
Simple Moving Averages (SMA)
Exponential Moving Averages (EMA)
Both SMA and EMA are averages of a specific amount of data over a prearranged period of time. Meanwhile, Simple Moving Averages aren’t subjective towards any specific point in time. On the other side, Exponential Moving Averages put a larger emphasis on more recent data.
Carry trading is one of the easiest strategies for currency trading that exists. A carry trade is when you purchase a high-interest currency versus a low-interest currency. For each day that you take in a trade, your broker will compensate you for the interest difference between the two currencies. It remains as long as you are trading in the interest-positive direction.
How Does Carry Trade Works?
A carry trade is when you make use of a currency that has a low-interest rate, then spend that money to purchase another currency that pays a greater interest rate. You make money on the difference between the interest rates.
We hope that you have discovered this introductory guide to Forex trading strategies for beginners useful.
Bear in mind that the standards we have shared mainly aim to get you believing about the philosophies involved. Don’t abide by a strategy without testing it first.
Feel free to put your experiment strategies to see if they will really bring profit to you.
Always remember to have a small starting amount so you don’t lose a huge portion of your investment.
The other day, I was speaking with a financial planner and consultant, and she indicated to me that many of her clients merely send her a text message. She then scans her text messages, finds the information which is needed, and then calls them back when she has a ready. She also uses the text messages she receives for her business as a “to do list” and for doing her scheduling. In other words, it’s very similar as to a consumer inside of a deli, or ice cream shop;
“Please take a number and you will be served in the order received.”
About four months ago, I talked to another young lady who is a coach. She has many clients and they are able to contact her by phone so many times per quarter, and send her e-mails, which she will then reply to. It would seem to me that if she used “Text Messages for Scheduling” in a similar way as the financial planner did, it would fit very nicely with her micro-consulting coaching profession.
Taking this one step further, it might also be good for a social networking system such as Google Plus, to allow people to send tweets, or text messages to various industry professionals so they could get advice. Leaders and experts in the industry could offer micro-consulting services using those text messages or tweets – or whatever Google+ decides to call them – in a similar way to schedule whom they will serve in what order.
Now then, whereas someone designing such a system might play around with it a bit to figure out the best combination, I think any micro-consultant, or coach should consider this. First of all the methodology is simple, it works, it’s easy to keep track of just as if you were to write a To Do List. In this case it’s only a modern version of that, and it helps the user stay organized. It also ensures that the people leaving the text messages will get called back on a timely basis.
Further, it offers a lot of freedom because if you are running your micro-consulting business this way you could run your normal errands around town, go to Starbucks, go to lunch, and service your micro-consulting clients as time permitted between activities. Therefore this mobile technology would give you more freedom, which is indeed its purpose. It also puts you in control of your clients, and makes you more efficient in doing so. Indeed I hope you will please consider all this and think on it.
Shortening the sales cycle to increase sales is high on the list of sales management in the current times. A consultative selling method helps the buying committee, (which may be one person), create a vision of a solution based on value. With higher value, faster decisions can be made.
Imagine working on a project for numerous months to get to the end where the customer says, “I just don’t see enough value to take on the additional risks”. In addition, studies are showing sales cycles are getting longer and customers are buying less.
Many companies embrace the belief, “bad news early is good news” to help sales work on those projects which have a higher likelihood of leading to a win-win with their customers. This is the “What and Why”, let’s review the “How and When” to accomplish this.
From a 30,000 foot view, the first step is to break down the buying cycle into 3 main phases. We use the buying phases from one of the largest studies done on buyers in the past by Xerox.
NOTE: Think of “decision makers”, not procurement, when reading the word “buyers”.
1. The first phase in the buying process is discovery and the buyer is focused on the people who can help them discover their compelling needs and assist in developing a vision of a solution. During the discovery phase the main buyer concerns established in the study were needs and a solution.
A consultative selling method allows the sales team to have a business conversation and help the buyer during the discovery phase identify their needs. As the needs are defined, the reasons which are preventing the company from achieving their needs can be explored and the appropriate cost with each reason. In addition, the product and service capabilities, (not feature statements), can be lined up with the associated reasons.
At this point the buyer can begin to form a vision of a solution based on value in their mind, (not the sellers). Our clients have sales document the value back to the customer in writing. This allows the creation of one of the first gates around “bad news early”. If the value is too low to justify an investment, the interest in pursuing a project should be low for both the buyer and the seller.
The written document allows a second conversation to occur around whether the value is sufficient to continue evaluating the products and services being discussed.
2. During the second buying phase, evaluation, the focus shifts from the people who can help them to the products and services offered. The buyer is now interested in proof the products and services being discussed can help them achieve their needs. They are also interested in how difficult it will be to transition to the new products and services for their company.
The curse of knowledge says, “The customer knows how to evaluate products and services”. However, if you are selling difficult to understand products and services, this is rarely a true statement. Especially if your company offers unique capabilities. Using a consultative approach, a mutually acceptable buying evaluation plan is prepared between the seller and the buying committee, (which may be one person).
A properly created buying evaluation plan will help the customer make better and faster decisions working towards a time line they have agreed upon during the creation of the written evaluation plan. Having a plan in place also allows sales, as well as the buying committee, to question when milestones are being delayed. Numerous delays begin to paint a picture around other priorities and the potential of “bad news early”.
3. The final buying phase, commitment, may naturally occur providing there is sufficient value to proceed. It is not uncommon for our clients to tell us they have large projects which proceed with no price concessions at the end. If negotiation comes up, using consultative selling skills around negotiation and proper training, sales goes in prepared with “give-gets” to provide an overall “win-win” outcome. Avoiding heaving price negotiations, or in some cases, “bad news early” if the customer is not reasonable.
Based on our clients successes, shortening the sales cycle can be achieved using a consultative sales cycle lined up with the buying cycle. This helps increase sales by focusing on those opportunities with the best value and leads to better and faster buying decisions. The out come is shorter sales cycles overall.
About The Vision Group: The best of breed in effective sales organizations are utilizing a common sales method and their personnel understand both the “what” to do as well as the “how”.
Our clients use consultative based sales and marketing aligned with how their customers buy. Focused on the shifting concerns of how individuals make buying decisions to transition from “how we sell” to “how they buy our products and services”.
If you are a business owner – whether your business is a small, local mom and pop type of enterprise or a huge, multinational corporation – you must be in compliance with the multitude of environmental regulations that have been formulated over the past decades.
And it actually does not matter one iota whether or not you are personally concerned about the environment. The reality is that you must be in compliance with the law or your company and your livelihood will face potentially stiff penalties.
Consequently, in today’s world of ever-increasing rules and regulations, it is absolutely necessary that you hire an environmental consultant.
That’s because environmental consultants will save you money and time. They will make sure that your company follows the law and that it does not take any unnecessary risks with your land, your production, your facility acquisitions or even how you store your products.
Realistically, as a business person your main responsibility is running your business successfully. So do you really have the time to constantly research the latest regulations and then figure out if they apply to your industry and, if they do, whether or not your company complies with them?
Therefore, before investing in any property or building any type of a structure, you will have to ensure that you will not be taking on any of the previous owners or occupants liabilities that are related to the property.
If you are contemplating investing in any property it is imperative that you pay particular attention to any pollutants that may be present.
To facilitate this you will need to hire a qualified environmental consultant who can perform an assessment. He or she will be able to first ascertain if there may be any contaminants and then perform the proper tests to determine if any of these contaminants are likely to be present.
It’s important to keep current with the law and consultants can help you to do that. New environmental requirements seem to surface every day and laws change on a relatively regular basis. There usually aren’t enough changes to warrant hiring a full time employee, but professional environmental consultants should be able to keep you up to date and out of trouble with city, state and federal regulators.
Keep in mind that not every environmental consultant is the same. So, before your contract anyone check their experience and their credentials. Their qualifications and levels of expertise vary. They may be either a state licensed professional engineer, or a technician who is only qualified to run various tests, or something in between.
Realize that you may not need to spend the extra money required to hire an engineer for a small project. But if you have a significant project then you won’t want to try to cut any corners, and getting an engineer’s approval should be part of your business plan.
In any case, you will always want to make sure that you are doing things safely and that you will not do anything that will cost you a lot more money down the line. It just makes good business sense.