Alan Solarsh - Top 3 Forex Trading Strategies A forex trading strategy refers to a method of determining when to buy or sell a currency pair that a forex trader uses. A trader can use various forex strategies, including technical analysis and fundamental analysis. Alan Solarsh states that a good forex trading strategy will allow a trader to analyse the market and execute trades confidently while using sound risk management techniques.
Price Action Trading Price action trading involves analysing historical prices to formulate technical trading strategies. In addition to price action, indicators can also be used in conjunction. Although economic events are rarely considered substantiating factors, it is not unheard of for them to be included. As outlined above, several other strategies fall within the price action category. Trading with price action can be done over a variety of time frames (long-term, medium-term, and short-term). Many traders are attracted to price action trading because of the possibility of analysing multiple time frames. Range Trading Strategy Trading ranges involve identifying key support and resistance levels and placing trades around these levels. Generally, this strategy works well when there is little volatility and no discernible trend in the market. This strategy relies heavily on technical analysis. As range-bound strategies can be used within any time frame, there is no set length per trade. Risk management is an integral part of this method since breakouts are possible. Consequently, a range trader would like to close any positions that are currently range-bound. Position Trading Position trading is a long-term strategy that focuses on fundamental factors; however, technical methods can also be used such as Elliott Wave Theory. Minor fluctuations in the market are not taken into account since they do not have an impact on the broader market view. Alan Solarsh says this strategy can be employed on all markets from stocks to forex. A position trade has a long-term outlook (weeks, months, or even years!) reserved for the more patient trader.