Forex trading strategies are one of the most crucial tools for determining when exactly to buy /sell currency. This most important and decisive moment is also the most difficult to define. Different Forex trading strategies, based on technical analysis, will help a trader to accurately determine the time of purchase / sale, thus providing maximum profits.

Forex trading strategies in combination with technical analysis is usually used, especially to determine the time of entry / exit. Most often, a decision is made within seconds or hours.

Key Forex trading strategies:

1. Using Support and Resistance levels

Sound Forex trading strategies, similar to this one, remain profitable, even though they started to be used long ago. When Resistance is broken, it can serve as a good sign to buy. This new position can be secure with the aid of a stop-loss placed directly below the level of a break. The level of a break now will become a level of support. New positions can also be opened, when in a descending trend the prices rise up to the Resistance line. New positions can also be opened, when in an uptrend the prices fall down to the Support line.

2. Intersection of the trend lines

Looking for the price to cross the trend line is yet another one of common Forex trading strategies. Prices crossing the lines of the trend allow a trader to enter the market or to exit the market early enough, especially when the crossing has occurred on a “proven” trend-line. However, do not forget the other indicators of technical analysis. When using the trend line as the level of Support and Resistance, long positions (Buy) should be opened on the fall of prices to the level of an upward trend, and short positions (Sell) should be opened with the rise in prices to the level of a descending trend-line.

3. Scanning the breaks

Three Forex trading strategies for trade at the time of breaks:

- Open a position in advance, in the anticipation of a break;

- If you see an unfolding break, open your position at the time of its occurrence;

- Wait for the inevitable roll-back after the break, because in the market after a break, there is usually a correction.

You can additionally use a combination of the above Forex trading strategies, and try to open a position in each of these phases, i.e. before a break, after the break and during a correction, which is likely to follow a break.

4. Choosing a suitable time frame

1). Long-term holding of open positions ranging from a few days to several months, these types of positions are maximally effective in the emerging trends and the least effective at the time of flat trends. When working on long-term positions, fundamental analysis is just as important as technical analysis. This is one of the moderately safe Forex trading strategies.

2). Medium-term trends, up to several days. Medium-term positions are more stable for profit, although the analysis for the decision-making is more complex in this case. It is also very important to choose the right time of opening and closing positions. When you open medium-term positions, be sure to not only use technical analysis but also fundamental. This is one of the safest Forex trading strategies.

3). Short-term positions, lasting from several minutes to several hours. Pluses: there is no risk of fundamental news and the changes in prices at the time of your absence. Disadvantages: high risk of adverse movements in prices requires constant monitoring and concentration throughout the day. Basically, if a trader uses the data on a number of sellers and buyers in the market, that data will give the trader the needed information about where the market seems to go. Super-short-term trading could also be used with breaks and rollbacks. Super-short-term trading is highly risky, and thus it better suits professional traders and market-makers. This is the least safe Forex trading strategies.

Sound Forex trading strategies will aid you in finding the best times for your transactions. Sound Forex trading strategies remain useful for decades.

About the author: Steve Maenshel has been a professional trader for ten years. He can help you understand forex trading strategies. For more forex trading information, visit his forex resource center.