Strategies for Making Money in the Forex Market

If you want to make money in the Forex market, in addition to having good judgment, strategy is also a very important factor. Today I will bring you three major strategies for making money in the Forex market.

Hedging order trading strategy in volatile markets: "Hedging orders" using the same currency are called "direct hedging". The purpose is not to "lock orders", but to open "one buy" and "one sell" positions at the same time when the market has been consolidating in a narrow range, and set up take-profit and stop-loss. The disadvantage is that it is difficult to grasp the positions of stop loss and take profit, and it is possible to stop loss and exit on both sides.

Linked trading strategy: This strategy is also called "neutral hedging", such as using EUR/USD-USD/CHF, GBP/USD-USD/CHF, AUD/USD-NZD/USD, etc. Utilize the linkage of currencies to enter the market and operate "neutral hedging", but in order to reduce risks, unequal positions will be used to open positions, and the overnight interest differences of currencies will be used to earn interest spreads. For example, EURUSD=1.06 and USDCHF=1.00, you can open EURUSD to buy 1.0 lots and USDCHF to buy 1.06 lots to offset the risk. But the disadvantage is that when the two currencies diverge, the losses from Forex fluctuations will be much higher than the interest income.

Carry trading strategy: This strategy is relatively simple. What you need to watch out for is the rapid and substantial reversal of the market in an instant. According to historical statistics, we have found that currencies in carry trades can easily reverse rapidly after a large rise or fall, causing investors who execute carry trades to be driven out of the market before they have time to make a profit. Currently, the currencies that are more suitable for this strategy include AUD/USD and AUD/JPY for buying orders, and EUR/AUD for selling orders.

Martingale and Anti-Martingale Trading Strategies: Martingale’s theory is to double your deposit if you lose, while anti-Martingale is to double your deposit if you win and reduce your deposit if you lose. The Martingale strategy is actually a strategy that uses probability to make profits. This strategy is not only used in the Forex market, but is also widely used in many other financial trading markets. If there is no perfect fund management protection mechanism, the losses caused by using this strategy to open more and deeper positions will be very large and fast, and it is very easy for the profits to be wiped out when encountering a big loss. But the anti-Martingale strategy is just the opposite. It increases the bet after making money and reduces the bet after losing money. Therefore, when the market has a trend, executing the anti-Martinale strategy can lead to very amazing profits.

Ultra-short-term strategy: The analysis period is mainly on the 5-minute chart, and the profit target is generally 10-40 points. Stop loss is generally half of the profit. The key reference is M10 and M60 in the moving average chart. Daily Forex transactions are available in Asia, Europe, and the United States, and most transactions are concentrated in the European and American markets. The advantage is that it is more flexible and does not require long-term patience and waiting. The difficulty is that the loss must be stopped in a timely manner. The disadvantage is that the handling fees for frequent transactions are relatively high.

Intraday short-term strategy: The analysis period combines 5-minute and 30-minute charts. Forex profit-making techniques are generally set at 30-80 points, and the stop loss is half of the take profit. Its trading is mainly concentrated in the European and American markets between 16: 00-24: 00 Beijing time in the afternoon. The recommended currency pairs are European and American, Pound-USD, Australian-USD, and the not-recommended currency pairs are cross and US-Japanese.

Swing trading strategy: The holding period is medium to long, mainly during the day. The profit target is generally between 80-400 points. One side requires a larger amount. At the same time, you can consider operating gold among precious metals. The technical chart selected is generally the 4-hour chart or the daily chart, and the entry point refers to the 30-minute chart. In addition to the moving average, resistance and support should be decomposed. The advantage is that it saves time and effort, and you can easily obtain swing profits. The disadvantage is that it requires larger funds to maintain a lighter position. The stop loss level is 1/3-1/5 of the profit target.

Don’t worry about others doing better than you, just do better every day than you did the day before. Growth is a game with yourself. Work is still very busy, you can still be organized, the market is still fluctuating, and you can still wait patiently.