9 Best Forex Trading Tips
and Techniques For Beginners
The Forex market is filled with hundreds of different trading strategies suitable to each type of trader, but what are the Best Forex Trading Strategies for beginner traders specifically?
It is a well-known fact that the forex market is the largest financial market in the world and it is no surprise that the popularity of Forex Trading has seen a steady increase. Following a forex trading strategy and learning the techniques to trade is the key to success. Whether a trader is just starting out in forex trading or has already established a name for themselves in the trading community, the truth is – a forex trading strategy is crucial. Beginner traders should spend a significant amount of time researching forex trading strategies, techniques and educational materials.
Multiple forex trading techniques and tactics exist, which can surely be confusing to beginner traders and there are some key forex strategies that beginners should use for their initial steps in the market. These Strategies and techniques include:
Trend following is an essential, straight forward and easy to master forex trading strategy which helps beginner traders to become experts in the field. Forex traders can benefit from the “ups and downs” of the financial market and all a trader needs to do is keep an eye on the trends, assuming that the trend will continue to follow the same direction.
The Trend following strategy requires:
- Close observation of charts
- Close observation of patterns
- Close observation of changes
Traders will have to decide if they want a long-term or a short-term strategy, which in turn will give them an idea of what type of data and charts to use.
Trend Line Trading Technique
One of the most effective forex trading strategies when it comes to charts and indicators is the use of trend lines. Basically, traders draw a straight line that connects at least two different price points on a chart. Trend lines present an indication of price movements and directions, assuming that the forex market always moves in trends.
Taking advantage of breakouts have proven to be another effective forex trading strategy. Breakouts indicate when a new upward trend is starting. A breakout will happen when a market moves in a new direction, beyond its support and resistance indicators. Although not every breakout will result in a new trend, this forex trading strategy is still a good trading opportunity to be at the right place at the right time in order to enter an emerging trend early on.
Momentum Forex Trading Technique
Momentum is one of the most popular forex trading strategies when it comes to beginner traders and it is a trading technique in which traders can buy or sell currencies based upon recent price trends. Momentum is determined by factors which includes trading volume or the rate with which prices change. The Momentum strategy is based on news releases and trends supported by high volumes. If an asset price is moving in a specific direction, a trader who uses the momentum forex trading strategy will trade, betting that this price will keep moving in the same direction.
Daily Fibonacci Pivot
This specific strategy uses Fibonacci retracements, combined with daily, weekly or monthly pivot levels, to calculate support and resistance levels which results in providing certain trade entry points. The parameters for the Fibonacci levels can be chosen by the trader but most experts say that most forex traders use 38.2%, 61.8%, and even 100% retracements in their forex trading plans.
Simple Moving Average Crossover Strategy
Another strategy which can benefit pros and beginners alike is the simple moving average crossover method. This strategy focuses on utilising the simple moving average or SMA and requires the identification of three moving average factors: fast-moving, slow-moving, and trend indicator. Through SMA, a trader can identify different trend directions to set up buy and sell signals.
Bollinger Band Bounce Strategy
Although many forex trading strategies rely on distinct trades, the Bollinger Band Bounce strategy on the other hand will allow traders to trade even when trends are absent. The Bollinger Band Bounce forex trading strategy is an appropriate strategy for the ranging market and offers a very good way to cope with the restricted range of price movements.
Forex Dual Stochastic Trade Strategy
The Forex Dual Stochastic Trade is a very successful forex trading strategy which is based on combining a slow and fast stochastic and this strategy can help forex traders by giving them an indication that a price is trending but is overextended.
How to Test A Forex Trading System.
The fastest way for a Forex Trader to test a system is to find a charting software package where they can go back in time and move the chart forward one candle at a time. When a beginner trader moves their chart forward one candle at a time, they will be able to follow their trading system rules and make their trades accordingly. Traders must record their trading record, and be honest with themselves at all times – Record wins, losses, average win, and average loss.
This being said, the best of techniques can’t be profitable when a trader chooses the wrong Broker with which to trade. Here is an overview of the 4 Best Forex Brokers and Trading Platforms for Beginners.
- eToro: Best trading platform for copy trading
- Saxo Bank: Excellent platform, high minimum deposit
- easyMarkets: Unique trade protection tools
- Admiral Markets: Best forex education variety
eToro is an online broker which was founded in 2006 and offers CFDs and Social Trading, with a head office based in Cyprus, UK. eToro is supervised by the Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC) regulatory bodies and has been in operation for over 14 years.
eToro offers traders two ways to trade: CFDs, Social Trading and eToro traders will need to make a minimum deposit of $200 and the platform can accommodate various levels of traders from beginner to expert. Traders can trade in a wide variety of over 100 instruments and over 50 currency pairs on eToro’s user-friendly custom trading platform which is available as a browser-based web application. eToro also offers traders mobile apps for Android and iOS, making it easier to keep an eye on and execute trades.
eToro trading accounts on offer include: Demo, Micro, Mini, Standard, STP and Islamic. eToro supports a wide range of languages including English, German, Spanish, French, and Italian. 24/6 customer support is available via telephone and support ticket.
EasyMarkets is regulated by CSEC (Cyprus) and ASIC (Australia) and offers beginner and established forex traders:
- Enhanced risk management tools as standard
- Fixed spreads on all forex pairings
- An easy to use forex trading platform
Risk Management Tools on offer include:
- Guaranteed Stop Loss Orders
- Negative Balance Protection
EasyMarkets offer traders a choice of 4 Account types, the Standard, Premium, VIP and SuperVIP. Their minimum opening deposits are $100, $1 000, $2 500, $50 000 respectively. A demo account is also on offer. The trading platforms on offer are the MT4 and the easyMarkets web platform.
EasyMarkets offers award winning customer service during market hours via live chat, email, fax or telephone. EasyMarkets customer service is available in four languages – including English, Polish, Chinese, and Arabic.
Admiral Markets is an online broker which was founded in 2001 and offers Forex and CFDs trading, is globally recognized and has a head office based in the UK. Traders will need a minimum deposit of $200 to start and can sign up for a demo account to in over 148 instruments and over 40 currency pairs.
Admiral Markets is authorised and regulated by the UK Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), the Cyprus Securities and Exchange Commission (CySEC) and the Estonian Financial Supervision Authority (EFSA).
Admiral Markets Trading benefits include:
- Allows scalping
- Allows hedging
- Offers STP
- Low min deposit
- Offers Negative Balance Protection
Admiral Markets Trading Accounts Offered:
- Demo account
- Micro account
- Mini account
- Standard account
- ECN account
- STP account
Admiral Markets offers both of the MetaTrader platforms; MT4 and MT5 and mobile apps for Android and iOS. Admiral Markets offers multilingual customer support via Telephone, Live Chat and Email.
And last, but not least –
Saxo is a globally regulated, multi-asset class broker which offers traders the option to trade on more than 40,000 instruments covering Forex, CFDs, Stocks, Options, ETFs, Commodities, Futures, Bonds and Mutual Funds from a single account across multiple platforms including their own – SaxoTraderGO and professional-grade SaxoTraderPRO. The Saxo Group is regulated in 15 jurisdictions including authorisation from the UK Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), the Financial Services Agency of Japan (FSA) and many more.
Deposits can be made via credit and debit cards, bank transfer and stock transfer. Customer support is available in nearly 30 different languages via phone, email and an FAQ section.
A Step Further from Trading Techniques is self-education. This is made extremely easy and accessible due to a large collection of information made available in both printed and online form.
Beginner Traders can start off by investing in the following 3 Best Forex Trading Books for Beginners written by experts in the field.
Currency Trading for Dummies
Written by Kathleen Brooks and Brian Dolan
The Dummies series of books are without a doubt some of the best on any subject matter they cover. Currency Trading for Dummies on forex currency trading is an excellent choice for anyone considering entering the foreign exchange market and contains a thorough breakdown of each of the major currencies along partnered with tips and tricks on how to trade FX markets. In addition, there is added information on what factors drive the various economies. Currency Trading for Dummies is perfect for beginners or those looking for an in-depth refresher ‘course’.
Forex Trading: The Basics Explained in Simple Terms
Written by Jim Brown
This book is one of the best books available on the market for those who want to learn to trade forex currencies, breaking down the basics into the simplest possible of terms. Traders of any level can pick this book up and understand it, and use it to create their own trading strategies and techniques.
And last, but not least –
Forex Trading 2020: Guide for Beginners. Secrets, Strategies and the Psychology of the Trader to Earn $10,000 per Month in No Time, Manage the Risk and your Money
Written by Norman Davison
This book explains the ins and outs of the forex market, including technical analysis, strategies, and more, but it also touches on newer markets such as Futures or cryptocurrencies.
For those who prefer learning online, Multiple Forex Training Courses are available and here is an overview of the 3 Best.
Platinum Trading Academy
The Platinum Trading Academy is an Online Trading Academy with Expert Forex Mentors who collectively share over 50 years of experience in the Financial Markets.
The Platinum Trading Academy – Forex Foundation for Beginners covers many different topics and their tutorials include the following:
- What is Forex trading
- Forex Principles
- Forex Trading Examples
- Forex Trading Charts
- Forex technical analysis
- Forex risk management
- The psychology of Forex trading
Access to the following is also available:
- Platinum live trading floor
- Long-Term analysis charts
- Platinum algorithmic system
And one on one personal mentoring.
Bizintra allows users to develop their trading skill set and learn to consistently place intelligent trades with confidence. Bizintra teaches in a live environment – complimented by on-demand videos, daily trading signals and access to live traders at any needed time. Bizintra not only provides live education but also live support.
Bizintra offers courses in 3 categories.
training in financial markets all featuring an interactive, engaging learning experience, proven trading strategies and live trading support.
Six Figure Capital
The 14-day course offered by Six Figure Capital is the foundation for prosperous trading, designed to take any trader no matter their experience level from beginner to expert.
The Six Figure Capital 14 Day course covers:
Day 1: Introduction
Day 8: Technical Analysis
Day 8: Technical Analysis (Part 2)
Day 2: Currencies
Day 9: Harmonic Patterns
Day 3: Market Terminology
Day 10: Advanced Harmonic Patterns
Day 4: Identifying Your Trading Personality
Day 11: Confluence
Day 5: Japanese Candlesticks
Day 12: Risk Management &Risk Management (Part 2)
Day 6: Chart Your Way to Success
Day 13: Trading Psychology & Trading Psychology (Part 2)
Extra Module: A Day in the Life of a Trader
Day 7: Understanding the Market
Day 14: You’re Ready & You’re Ready (Part 2)
A Harmonic Mastery Course with 13 Advanced Modules is also available. The £800 one-time Lifetime Membership allows users to save over 33% Compared to the 12 Month Contract Membership.
Beginner Traders can also learn the tricks of the trade from following the Best in the Business across Multiple Social Media Platforms. These days, every time a person turns on the TV or scrolls online, there is some mention about Twitter or Instagram and their importance in Forex can not be denied. Some of The best to follow include:
Assad Tannous (@AsennaWealth) – On Twitter.
Assad Tannous is a fund manager who is based in Australian and has been a part of the financial market and trading for over 20 years. Assad’s Twitter feed is a great source of information and insight for traders who are just starting out in the market and pro’s alike. Apart from the Info and insight on offer, the feed provides valuable and hard-earned trading wisdom.
Samuel Leach (@samuelleach) – On Instagram.
After Samuel Leach graduated from University, he joined one of the United Kingdom’s leading independent private banks and founded Samuel and Co. Trading in 2012, which has become an international CPD accredited company. Samuel is a well-known Forex trader and a social media influencer, with an Instagram social media following which is currently standing at 300k+ followers. Samuel Leach is also a contributor to Forbes where he frequently posts about stocks on his watch and why he thinks certain stocks should be on a traders watchlist. Samuel has been featured in City AM, Reuters, Forbes and many other well-known publications.
While there are numerous methods of trading, the techniques mentioned above have been tried and tested and has all proven to have an excellent track record. While different techniques do exist, traders need to assess them and find which works best for them as an individual, as with platforms, tools and broker choice. Beginner Traders can keep the following quote in mind –
“The hard work in trading comes in the preparation. The actual process of trading, however, should be effortless.” Jack Schwager – Author of Market Wizards