Unfortunately, there is no single best strategy for beginners to learn that will definitely take them from zero to hero. As with many professions, there are different approaches and specialties within Forex trading that appeals to different people.
If we start off with two very broad categories, long term and short term trading. The difference between planning long term and holding trades for days, weeks or months vs planning on quick in and out trades which you can hold for minutes or hours at most.
Then inside that, it can be broken down further. Are you more likely to use technical analysis than news events? Do you use market sentiment as a reason to enter a trade or just to help confirm direction? Do you want to trade a pure price action based on market values and patterns, or use indicators like Moving Averages and Stochastics to help make your decision?
The truth is that we don’t know how you will end up trading until you have experienced a selection of trading strategies and styles. This is why in the training the JP Markets offers we try to use strategies that are more likely to appeal to a larger audience, but are also amazing learning tools. So even if you don’t feel comfortable with the strategy taught, it will allow you to adjust it, add to it or even look at totally new strategies and be able to figure out how they work.
The most important thing for a beginner to be aware of is that you need at least a basic understanding of the various trading styles out there so you can start focusing on what works for you.
In our trading course, for the technical analysis section we start off with a crossover system. It uses two moving averages, stochastics, MACD as well as the RSI. These are some of the most popular indicators and is a good way to teach people how to use them and what they represent.
Instead of just giving basic rules for the system, it is important for beginners to understand what each indicator is showing them on its own as well as how to use it in a group of other indicators and how they differ. From there you can start to feel an affinity towards a lagging strategy like a crossover, to a higher risk but faster entry system.
From there it can be adjusted, as an example we take out the RSI and show alternative ways to replace what it is trying to teach us. We can remove the crossover as the trigger and replace it with a faster moving Stochastic, and still use other indicators as confirmation. Or perhaps adjust the moving averages to help show the bigger picture and use the MACD signal as a potential entry.
The ability to adjust trading strategies is only possible if you have a good foundation and understanding of the system you are using. This allows you to be more flexible and adjust faster to changing market conditions.
And this is just one piece of the puzzle!
But don’t worry. If you approach it with care and learn to walk before you run, it becomes second nature to absorb all of this and you’ll be able to read the markets with ease.
At JP Markets we aim to offer you a premium service with all the possible resources to increase your profits. We succeed when you succeed.