Many forex traders ask Alan Safahi of Orinda, Contra Costa: How to overcome the odds stacked against me in the forex trading business? Alan Safahi is an experienced entrepreneur and the founder of a startup company in Francisco.
Safahi has a firm grip on the forex market and usually highlights that mind, money, and method are the three things that define success in forex trading. Today’s article will give you a list of seven strategies to tackle the odds of trading forex. Read on!
1. Market Sentiment:Market sentiment is an essential factor or strategy that drives forex trading. It influences your decision and triggers specific thoughts, feelings, and emotions. Alan Safahi recommends determining different elements that define the current market sentiment. Next, find out how you can incorporate sentiment analysis into your forex trading.
2. Trend Riding:Instead of closing your eyes and purchasing at any point during the uptrend or short-selling during a downtrend, you should focus on riding trends. Remember, there is much more to riding trends than simply focusing on uptrends and downtrends.
It is crucial to find ways that allow you to jump on a trend when it is the most robust. Avoid focusing on when the trend is about to end. That way, you can ride a trend with increased chances of success.
3. Breakout Fading:
The forex price charts can experience many false breakouts. The occurrence of these fake-outs provides you with an opportunity to leverage the power of fading breakouts. For instance, you can trade against those breakouts. Therefore, it is crucial to find out why most breakouts fail and identify fading opportunities with higher probabilities.
4. Breakout Trading:A large, sustained move in the breakout can occur due to currency prices break out at certain price levels. As a result, it leads to a situation that enables you to capture significant profits in the least amount of time.
However, the primary issue with the trading breakout strategy is that many of such breakout attempts fail. Therefore, it is wise to identify potential breakouts and related opportunities for this strategy.
5. Decreased Volatility Breakout:Decreased volatility breakout is somehow similar to the breakout trading strategy. It is because you will hope for a successful price breakout in both situations. However, this strategy requires that the foreign exchange market register a period of low volatility before you make an attempt to implement the strategy.
6. Carry TradeCarry trade is a fundamental trade strategy highly favored by Safahi. It is particularly beneficial for institutional investors. Before implementing this strategy or method, learn how a carry trade works in the forex market.
Carry trade allows you to profit from the interest rate spread and the currency’s price movement. It is crucial to focus on high-yield currency for a steady return. Likewise, this strategy leads to risk-free profit-making when you use the difference in currency rates.
7. News StraddlingThe foreign exchange market is sensitive to geopolitical and economic news worldwide, especially news related to developed countries like the U.S, UK, Canada, Australia, Germany, and France.
News is very important to forex trading because each new piece of data or information can change the perceptions of the trader’s current and future situation. It can also influence the outlook of specific currency pairs.