Forex is the world’s most popular financial market. Some traders make a living off it, being able to generate stable returns. However, Forex in particular and trading in general can be risky, especially when you lack a well-thought-out strategy. Read this article to learn more about possible trading strategies and reduce the associated risk. Here you will find the basic outline of the most popular trading strategies.
After you open an account and familiarize yourself with the IQ Option trading platform, you might want to dive into an exciting world of trading right away. However, you are first advised to go through the list of trading rules. Chances are they will help you avoid massive losses in the very beginning of your trading journey. Here are the most useful ones:
One of the main rules postulated by the popular strategy is that the trend is always your friend. To avoid making losses, you should follow the trend and not bet against it.
For example, before pushing the ‘BUY’ button, make sure that the trend is going up. This way, chances of making profit increase dramatically. Conversely, do not try to open a ‘SELL’ position during an uptrend. It may seem like a no-brainer but deals that oppose the prevailing trend are quite likely to end with a loss.
Another important Forex tip is to abide by proper risk management rules. In most cases you will be advised to decide beforehand the amount of money you are willing to spend on a particular deal. This way, traders can avert huge unbearable loses, and get better overall results.
The general strategy recognizes that emotional decisions can cause suboptimal trading results. As such, the broker advises traders to strictly follow their strategies and avoid making decisions based on their gut feelings (instead of the prevailing market conditions).
IQ Option provides clients with a demo account to enable traders to practice their trading strategies risk-free and perfect the art of beating the market. With this strategy, you can conveniently familiarize yourself with the broker's trading platform as well as other offerings before implementing them on a real trading account.
Here are some common trading strategies from IQ Option. You can watch all educational video on the Tutorials page.
Here are some common trading strategies from IQ Option. You can find all educational video in the ‘Tutorials’ section of the website.
Traders can use Japanese candlesticks to analyze the market and identify trading opportunities when working on the IQ Option platform. This is easily the most commonly used chart type, and a lot of trading strategies rely on the use of it. Japanese candlesticks can grant you access to advanced technical analysis tools, as well.
Some noticeable candlestick patterns include the pin bar, three black crows, engulfing patterns, and the hammer.
In trading, trendlines depict the additional lines overlaid on the price chart. They are meant to illustrate the prevailing market trend (the direction of the price movement). By using the trendlines when working on the IQ Option platform, you can highlight lucrative trading opportunities.
By using this trading strategy, you can effectively identify the current market trend; that is, whether the market is trending upwards, downwards, or in a sideways trend.
Most professional traders closely follow the changes in the level of market volatility, and for a good reason. Growing or shrinking volatility normally indicates changes in the market conditions. Therefore, in order to facilitate the use of this strategy, the broker will provide traders with access to Bollinger Bands — an instrument that is perfectly suited for volatility tracking.
Another noticeable strategy, available to the traders working with IQ Option, is based on the use of moving averages. Using this tool you can conveniently smooth out market fluctuations over a specified period of time and make well-thought-out trading decisions with a general picture in mind.
Some of the common averages provided on the platform are a simple moving average, an exponential moving average, and a weighted moving average.
All the tools mentioned in this article have been created with the sole purpose of making your trading activities as effective as possible. By using them, you can both reduce the risk associated with trading, and approach it in a professional manner.