Forex Trading as an activity, income or investment opportunity is flourishing, with an increase in demand almost daily. However, the trading world involves a fair share of complexity which requires that traders establish an adequate trading plan and strategies.
Forex Trading as an activity, income or investment opportunity is flourishing, with an increase in demand almost daily. However, the trading world involves a fair share of complexity which requires that traders establish an adequate trading plan and strategies.
There is a vast array of trading strategies and techniques which can be employed. Most techniques are considered more common, albeit classified as standard where others are more sophisticated, applying uncommon practices and unique techniques.
When considering this, depending on the trading style and trading needs and objectives of the trader, traders are always advised to thoroughly test their strategies before applying them in a live trading environment.
When applying trading strategies, it is necessary for traders to align them with their trading plan and to ensure that they accommodate their trading needs and objectives adequately.
Table of Contents
What are the 10 uncommon Forex Trading Techniques worth exploring?
1. Trading News Sources
Trading according to news sources may be an uncommon practice due to its complexity as it involves reported consensus figures along with whisper numbers which can be defined as the unofficial and unpublished forecasts, along with previous reports.
It is imperative for traders to identify key news releases relevant to their trading along with relevancy towards the currency pair that they are trading or intend to trade.
When trading the news, traders need to identify the releases that they can expect along with knowing which data is important, including interest rates, inflation, and economic growth which can be subdivided into retail sales, manufacturing, and more.
2. Mass Behavior
This strategy is one of many that greatly considers the behavior of the general mass which employs a signal to either buy or sell a financial instrument depending on whether the demand for it increases or decreases as participants show interest in such.
The general principal surrounding this strategy involves selling the financial instrument should the demand increase and buying only when it decreases with the expectation that a trend will form, and that demand will increase again.
This strategy describes the price movement of a financial instrument, or a currency pair which is often analyzed when prices are taken into consideration with such in the recent past.
In employing this technique, traders can read the market which enables them to make subjective trading decisions which are based on the most recent and actual price movements.
4. Trading Volume
The Forex Market is one of the largest and most liquid markets in the world and it relies greatly on volume to move from one price level to another. As result of this, the Forex Market is also the most volatile of all the markets due to such large movement.
When using this strategy, traders need to use a volume indicator which allows the trader to read volume in the Forex market and subsequently predict price movements on currency pairs based on the information provided.
5. Pivot Trading
When making use of this strategy, Forex traders are provided with potential support and resistance levels along with the advantage to minimize risks involved with trading Forex.
These pivot points indicate when the ideal time would be to enter the market, place stops, and take profits.
The pivot points used reflect a change in the market sentiment along with determining overall trends across a specific time interval with the focus on the important relationships that exist between high, low, and closing prices between trading days.
Pivot points are identified according to specific calculations that help the trader identify important resistance and resistance levels along with support and resistance levels.
The goal is for traders to look for prices that break through these support and resistance levels which signal new trends that may be developing and result in the chance for quick profits.
6. Trading Psychological Levels
There are key levels in Forex which tend to draw the attention of traders who are participating in the Forex Market. These psychological prices have a habit of tying into the human psyche and the way in which traders think.
These levels are market price levels that are often denoted by round numbers which often act as levels of support and/or resistance.
Due to the fundamental human disposition, humans are said to predominantly value simplicity and in trading terms, it involves valuing whole numbers and using them as entry, exit, or stop levels which can alter order flow as well as price changes.
7. ‘End of the day’ Trading
This strategy is often used by day traders who understand market reactions and allows them to benefit from the last movements made in the market closer to the time before the market closes for the day.
Closer to the time that the markets close at 5pm New York time, the Forex market is at its most volatile and a lot of traders can use this opportunity to harness the volatility by detecting specific behavior through studying the price action of the previous day.
This allows the trader to speculate on the price movement of the current day based on the trends of the previous trading day. This is, however, a very risky strategy that may lead to substantial losses if the trader speculates incorrectly.
8. Pattern Trading
Pattern trading relies greatly on the trader’s ability to read charts instead of applying specific indicators. When using this strategy, traders often use ‘necked’ charts which allows for them to read the price movement more accurately.
This results in a more accurate identification of the price movement’s behavior over a longer period, often over a few months or years.
9. Fool’s Trading
As one of the most uncommon trading strategies, this type of strategy does not involve the evaluation of trading data, but merely requires that the trader hold their current position for as long as possible in the hopes that another trader, or ‘bigger fool’ will buy the position.
10. Financial Astrology
This type of trading strategy depends on the belief that the financial marketplaces are influenced by planetary activities along with the lunar process.
In guessing the side effects associated with these, traders are guided by such movements in making trading decisions.
Final Thoughts
When considering these trading strategies including all others, it is apparent that traders cannot be guaranteed success in employing or continuously using them.
When entering the Forex Market with the intention of trading Forex, traders need to firstly ensure that they choose a reputable, reliable, and well-regulated broker by conducting extensive research and by comparing various brokers before choosing one.
Exploring the broker’s trading conditions, the trading platform offered along with the trading analysis and tools, amidst others is crucial, and trading strategies should first be thoroughly tested by making use of demo accounts provided by brokers.
These new pairs have been available since July 1st, 2019 and provide an excellent opportunity to diversify your clients’ portfolios and increase their exposure to this vibrant 24/7 market.
Asset
Typical Spread
Leverage
Margin
Min Nominal Trade Size
NEOUSD
1.5% Over-market
2:01
50%
10
EOSUSD
2% Over-market
2:01
50%
10
MIOTAUSD
1.5% Over-market
2:01
50%
10
To unify their cryptocurrency instrument labels, They are relabeling their existing Ethereum, Ripple & Litecoin instruments, by replacing the existing instruments with new USD labelled ones:
Asset
Old Symbol
New Symbol
RIPPLE
XRP
XRPUSD
ETHEREUM
ETH
ETHUSD
LITECOIN
LTC_Mini
LTCUSD
These new pairs have also been available since July 1st,
The trading conditions for each one is identical to those of the older respective assets they replace.
Effective immediately, new positions are only available on the new pairs.
Avatrade Clients will not be able to open new positions on the old assets, but those already open will remain unaffected until July 29th.
Existing positions on XRP, ETH and Litecoin-mini that remain open on July 29th will be automatically replaced with corresponding positions on the new pairs, , at the same opening price and at no cost to clients.
as any broker that values their clients would do , Avatrade makes sure that the clients will not be affected by the change.
Neteller one of the most known Digital fiat currency wallet provider , has started allowing its users to buy, sell, and hold cryptocurrencies including BTC, BCH, ETH, ETC, and LTC.
They do this on the large scale with a pilot in 10 countries and soon another 50 countries to join . They understand that if you do this effort it will only succeed if you can do this on a global scale.
founded in 1999, Paysafe Financial Services entered the market with the mission to provide an online alternative to the known traditional payment methods.
Most of the traders aiming us now neteller as one of the companies through which we made our deposits and if we had any profits also our withdrawals. A couple of years ago they left the Forex and Binary industry behind since the charge-back issue became just too expensive.
But as any companies knows, if you do not adept you die. The binary option market is all but dead and the Forex industry has moved also into the directions of the cryptocurrencies. thus, neteller understands that this is where the future is.
So Lasts week they announced that they are now offering a wallet with buy and sell cryptocurrency options.
As of today, Neteller users can buy, hold and sell cryptocurrencies via a recognized cryptocurrency exchange including bitcoin, bitcoin cash, ethereum, ethereum classic and litecoin, purchased using any one of 28 fiat currencies available in the Neteller wallet.
It may not seem so exciting but for many users that love this service it actually is. More and more currencies will be added making them an true exchange in the near future.
Now one is able to fund their neteller account through many different means (Mobile, Epay, Paysafecard, local bank deposits, and bitcoin)
We think that will make the threshold for many people, who would want to buy or sell cryptocurrencies, lower. This in return is a good thing for the overall acceptance of the cryptocurrencies in the mainstream of every day life.
The rates offered are somewhat in the lower middle of the current market making them go for the save route. The average market rates on the major cryptocurrency exchanges differ all in all not that much anyways, as this is not the main reason to choose to buy Bitcoin through Neteller
The minimum cryptocurrency purchase or sale amount is “approximately equal to 10 EUR,” the firm clarified, adding that the maximum amount depends on the transaction limits associated with each account.
When You open an account with Neteller you have to choose your default currency. This is of course for most people in accordance on their geographical locations, people in Britain will go for the pound most Europeans go for the euro and pretty much the rest of the work goes for the US Dollar, thou other currencies are available
The fee is 1.5 percent for purchasing and selling cryptocurrencies from wallets with EUR or USD as the default currency.
The fee rises to 3 percent for wallets with other default currencies.
Neteller | Why is this a good move for neteller and one that we should expect from other online Payment providers as well ?
At this moment till last week Neteller users can pay, get paid on thousands of sites, and send money around the world through their system.
The company claims to have “millions of point-of-sale, ATM and online locations” for users to withdraw or spend their cash.
Last July 25, Paysafe ( which as you remember is the company that owns Neteller and Skrill) announced that another digital wallet provider in its group, Skrill ( formerly known as moneybookers), started allowing customers to “instantly buy and sell cryptocurrencies, including bitcoin, bitcoin cash, ether and litecoin, using any one of the 40+ fiat currencies available in the Skrill wallet.”
We could now see that this was like their test run on this concept.
We do not know the numbers that Skrill produced since they offered this service but it must have been encouraging enough for Paysafe to include their flagship brand in this endevour.
We will see where this leads but we are hopeful that this is the next step in global acceptance to the cryptocurrency revolution. Let me know what you think
The currency trading industry and now also the cryptocurrency trading industry have gone through enormous volatile times the last couple of years. Now with trump and its trade wars. The fast rise and somewhat recline of the cryptocurrencies and the fast pace of international politics and economies that create high rises and steep fall of the currencies.
So what does it all mean and what can you do before start to trade on these news headlines.
Good brokers like LegacyFX and UBCFX provide the traders with the latest market news and updates on a continuous basis but if you are new to trading you still have no idea what to do with this.
You start by understanding that the involves a high degree of risk, including the risk of losing you hard earned money. Besides the ones that were lucky enough to have bought Bitcoin a couple of years back and cashed in in the end of 2017, most people don’t get rich overnight.
You have to understand that you only trade with money that you are able to lose, going hungry because you want to open a trade is not the right wy to go about it.
So, What is Forex?
You should by now understand that the value of currencies goes up and down every day.
This in general becomes apparent the moment you go on vacation and what you bought last year with your money now is not the same amount you get today at the exchange.
This is on a large scale, what a lot of people do not know is that there is a foreign exchange market – or ‘Forex’ for short – or “FX” for even shorter, where you can potentially make a profit from the movement of these currencies.
The most known Trader is George Soros who made a billion dollars in a day by trading currencies. This is of course on a scale that we are not able to reach and you need a huge amount of money to begin with. Still he made a billion in one day!!
The internet has played a huge part in making trading in currencies accessible for the masses. You also do not need huge amounts of money to actually do this. Now keep in mind that if you make 10% profit on your investment but the investment was just $50 you basically just end up with $55. still no bank will give you 10% interest on your money.
Many people and I am talking millions are now trading every day, most do this on the side and don’t do this as a full-time job, but there are today enough people that are full time traders and making enough money to live comfortably.
Retail forex market needed Brokers
The Forex market for the retail market was born, it started around 15 years ago to become more serious as technologies advanced and the stream of information became almost instant, this is important for trading as one second can make the difference between profit or loss.
So, the moment the technology was there the people that wanted to trade were there all that was needed were the Forex brokers that offered the platform for trading.
There are latterly hundreds of companies of not thousands that offer this service and there are good ones like LegacyFX and there are scams (these tend to not last long)
Forex explained in short
The Forex market is the largest financial market on the planet and has been for many years now.
Its average daily trading volume is more than $4 trillion. (just let that number sink in for a second). Of this total amount around 5% is the retail market meaning traders like you and me. Still 5% of 4 Trillion is still a number with a lot of zeros behind it.
If you compare that with the New York Stock Exchange, which only has an average daily trading volume of $55 billion. You truly see the size.
To give you another example:
if you were to put ALL of the world’s equity and futures markets together, their combined trading volume would still only equal a 25% of the daily Forex market. Insane right?
Why does this even matter?
It matters because there are so many buyers and sellers that transaction prices are kept low. To explain how trading the Forex market is different than trading stocks, here are a few major benefits.
Most Brokers don’t charge commissions – you pay only the bid/ask spreads.
There’s 24hour trading – you decide when to trade and how to trade.
You can focus on your currencies and become experts in only those pairs that you follow instead of following and selecting out of 5000 stocks
You can trade on leverage, (something to be very aware of as it can magnify potential gains but also your losses).
Forex is accessible for almost everyone– you don’t need a lot of money to get started
In the Forex market you can trade on Demo accounts to learn before you commit your money
How is Forex traded?
The mechanics of a trade are virtually identical to those in other markets. The only difference is that you’re buying one currency and selling another at the same time.
This is also the reason as to why the currencies are quoted in pairs, like EUR/USD or USD/GBP.
The exchange rate represents the purchase price between the two currencies.
Example:
The EUR/GBP rate represents the number of GBP one EUR can buy (relevant now with all the Brexit issues going on) . If you think the Euro will increase in value against the British Pound, you buy Euros with British Pounds. If the exchange rate rises, you sell the Euros back, and you cash in your profit.
Now the same works for strading Bitcoin, ethereum, Litecoin or other cryptocurrencies. this has become an entire new market and has introduced many people to Forex . you should here be also aware that trading cryptocurrencies is like regular trading so you will be able to lose great sums of money.
the Best thing i found about trading cryptocurrencies is that the Leverage by default tends to be very low which makes the risk of losing it all much smaller.
Sounds simply enough?
Why does not everyone Trade.
The same could be asked as to why not everyone plays poker, you can make money. The comparison between the 2 is actually closer than you might think.
All traders that are successful will tell you that 80% of successful trading is psychology and the other 20% is research. It takes time to get the research down, but it can take a lifetime to master the psychology.
People tend to do things differently when real money is on the line and are accepting losses in the hope that the trend will reverse or taking out profit too early because they don’t want to lose what they just have gained. In short, the psychology is the hard part.
One should be aware that you can loose real money and a lot of it very fast if you don’t know what you are doing.
Now most Good Forex brokers offer some educational tools, some more than others that will teach you how to trade. There is also something that is called social trading that will allow you to follow other traders and see what they are doing in order for you to learn and make money at the same time.
So here are some ground rules for those that look to start trading
Get involved in the market, watch read and listen to the news to understand what is happening
Go through a trading course ( a good one is here)
Open a demo account and trade at least a month (my advice to do this even longer)only on this before you even think about trading with real money.
Check out social trading, there are some options for this, this broker offers this also.
Try with an amount that you are able to afford losing. See this as your tuition money.
Take it slow, don’t become greedy and follow the basic rules
Basic Rules (there are many more but start with these)
The trend is your friend
Don’t add money to a losing position
Don’t trade on too many different currency pairs
Trade only with a good broker
Don’t open to many positions (no one needs 100 positions a day)
Develop your strategy and stick to it.
Know that NO ONE is 100% of the times right, everyone loses some.
Last but not least, don’t trade with money you cannot afford to lose.