To trade Forex online there are some strategies that would simplify the process:
One of the easy Forex trading strategies is the use of “currency analysis” to forecast market fluctuations and currency prices. There are two different methods to analyze currency: technical and fundamental analysis.
The technical analysis method takes the prices of the currency pairs, during a time period, to look at movements in the past. The aim of this is to identify trends and the volatility of a currency pair price; however, the result cannot be taken as an absolute fact to predict the future price. But it can help investors to have an idea of what is likely to happen. Technical traders use many indicators to trade Forex online like pivot points, usually combined with other indicators and charts.
The fundamental analysis looks at factors that can impact the value of the currency such as: political and economic factors, like the interest rate, employment situation and others. Technical and Fundamental analysis are usually used together.
The support and resistance levels are also an easy Forex trading strategy; the support is the lowest price of a currency in a certain time period and the resistance is the highest. As the price of the currencies is fluctuating all the time, traders can conduct research to identify the support and resistance levels in the past (for any specific day or a longer period) this is to have a range of the currency activity. With the use of longer time periods the trader is also able to identify a trend.
Another easy Forex trading strategy is the “day trading strategy”; with this strategy, any position will be opened and closed during the same trading day. Day trading allows for making several small trades during the day. The price fluctuations during a day could be small in comparison to the fluctuation of a week for example, but by making many trades it is possible to get small profits and at the end of the day have a large total. This strategy is used mainly for beginners to trade Forex online.