3 Methods in Forex Trend Trading

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In Trend Trading, it is imperative that you are aware of what type of forex trader you are before you can adopt this strategy. Although you are most likely to follow the movement and trend of the market, you need to identify the opportunities that come with the current trend. Here are 3 ways that will help you to do so.

The Buy-Dips Method – This is one of the most common strategies in forex trading. It is quite similar to that of other investing methods where you want to buy at a low price and sell them when the price goes up and make a profit from there. New traders tend to use this strategy because it is basic and easy to implement. The more experienced ones will take it a notch further by utilizing indicators and other factors before buying any dips.

The Breakouts Method – This strategy is somewhat the opposite of buying dips. It is rare and unconventional because you are waiting for the price to move higher and then buy at a higher price. In Breakouts, you are basically playing on the emotions of the market when bubbles develop. One good thing about Breakouts is that you will be entering into a buying position when the prices are ‘confirmed’ that they will be traded at new high prices.

The Baskets Method – This refers to a collection of currency pairs are traded with the mentality that it will have a higher currency move. In most cases, Baskets is where exchange rates are quoted in pairs like USD/JPY, EUR/USD and so on. Trading baskets however is usually more suitable for experienced forex traders as it require experience, practice and good instincts.