Forex trading strategies are used by successful trader's everywhere. Why? Because a good strategy keeps your trading profitable and consistent. It allows you to build equity over the long-term. A strategy is essentially a collection of rules or guidelines. These help to keep traders on track and keep them doing what has proven to be effective according to their trading plan.
Forex strategies contain information which is designed to eliminate guesswork. Some of this information may include such things as what currency pair to trade, how much capital to allocate to a particular trading system, as well as a central money management criteria. What follows are some of the different types of strategies one may employ.
Many traders have found that long-term Forex trading suits them best. Long-term trading, however, is not for everyone as it requires, or should I say is it typically requires a larger amount of working capital. One reason for this is that longer-term strategies may have larger drawdowns and that makes a huge difference in the required amount of capital. One of the best advantages of long-term trades is that they don't have to be monitored once you've placed your initial order as well as your contingency orders. Long-term trades also can catch huge trends and take advantage of the momentum the Forex market can provide during some of its volatile moves. This translates into huge profits per contract which can make long-term trading extremely profitable.