The foreign exchange market or foreign exchange (Forex) Market is one of the transaction market fields that has developed revolutionary in recent years, along with the times, Forex trading can be done through internet media access so that Forex Trading can now reach the middle economy class.
Who were previously hindered by agency costs of equipment cannot carry out Forex transactions easily, considering that the volume of Forex trading reaches $1.95 trillion or equivalent to 19,500 trillion rupiahs on a daily basis
Hearing the number of transactions offered, it is not surprising that the general public has started to think about getting involved in these Forex Transaction activities, from a brief overview of forex, it would be nice for us to know in advance about the strategy in terms of Forex transactions / Forex Trading Strategy.
Forex Strategy
Forex strategy is a way for forex traders to determine when to “buy” or “sell” a foreign exchange value to be traded, in the world of Forex Trading itself there are several variants in terms of forex strategy where the difference is seen from the analytical techniques used.
Used in terms of seeing how to execute forex trading where it is divided into 2 namely; fundamental analysis and technical analysis.
Fundamental Analysis
This forex technical analysis basically analyzes the occurrence of movements in foreign exchange values seen from several economic factors that affect the country’s currency.
Where usually this technique is more inclined to use data to determine the occurrence of an increase or decrease in the value of foreign exchange.
Forex trader fundamentals are usually used for traders using this analysis strategy, where the data in question is data on the economic value of a country such as inflation, Gross Domestic Trade (GDP), employment opportunities and even look at data from the central bank of each country regarding interest rate benchmarks to determine the value of foreign exchange.
Therefore due to the need for data to be used as a benchmark in terms of forex trading activities, this strategy is usually carried out by forex traders who trade long-term activities.
Technical Analysis
Technical analysis looks at the movement of foreign exchange values based on patterns from price charts, such as triangle patterns, flags, and double bottoms to see price movements of foreign exchange. Unlike the fundamental analysis method which uses data as the basis for foreign exchange movements.
Technical analysis looks at more from a movement of the listed price chart to determine the value of foreign exchange, a technical forex trader will look at the price chart to determine the movement of the value of foreign exchange. Usually, this forex technical analyst is used for short or medium terms in forex trading activities.
Other Forex Strategies
A good forex trader will first analyze the market with careful execution thinking in its activities and carry out risk management in it, after knowing forex trading analysis techniques we need to know some forex trading strategies, including:
Price Action Trading
The price action trading technique is essentially a strategy to predict the movement of foreign exchange values based on the price history of foreign exchange to be used as a basis for assessment by a technical analysis trader wherein the appraiser this price history is divided into several ways such as Fibonacci retracement, cadle wicks, tend identification or oscillators that produce different entry/exit point results but with the same database, the time range of this trading strategy activity varies from short, medium to long term.
Range Trading Strategy
This strategy indicators support and resistance points to be used as a focus for traders to open/buy a foreign exchange, this strategy work well in the foreign exchange market without looking at the trend from a chart.
This strategy is widely used for technical analysis traders by using the Oscillator to find a time of entry/exit points.
what is done in this strategy is to use the RSI oscillator to see when the foreign exchange situation is called overbought or oversold and buy foreign exchange on the chart at the point between oversold and oversold prices without passing it based on technical analysis calculations, the downside of this strategy is that it requires a relatively short investment time.
Long and must have knowledge of technical analysis, but the advantage of this technique is to have a balance in indicators regarding the advantages and disadvantages.
Trend Trading Strategy
The essence of this strategy is to see the advantages of foreign exchange by analyzing the momentum of price movements in a certain direction, namely by looking at the movement of the chart of foreign exchange and concluding the momentum pattern which is usually carried out every few nominals of the value movement.
Like the chart above where it can be seen that the value of the trend movement of a foreign exchange usually moves minus after the price increase is between 370-450 from the increase in value.
Day Trading Strategy
This strategy is essentially buying and selling foreign exchange on the same day as the day of buying foreign exchange by selling the foreign currency, this strategy activity can trade many times a day, wherein Day Trading Strategy activities to get profits you have to look at the trend that is trending.
Indicates an increase in a foreign exchange or a decrease in the price of a foreign currency, in essence, its activities are the same as the trend trading strategy edge, the difference is that trading activities are only carried out with a period of time per day with selling or buying activities of foreign exchange.
Forex Scalping Strategy
Scalping in forex is generally used to describe the trading process in a very short period of time usually in minutes or hours which is definitely executed on the same day, were to determine the Entry / Exit point in this strategy.
The first of course is to look at the trend of a foreign exchange chart, where Scalpers (a call for scalping strategies) use Chart indicators to determine what will happen in terms of foreign exchange movements on the chart.
Usually look at the momentum of the algorithm to determine buy and sell activities of a trading activity while avoiding long-term trading activities, but the profit of this strategy is to minimize the loss of long-term forex trading.