Best Forex Trading Strategies When Trading the Kenyan Market

Identifying a successful Forex trading strategy is an important aspect of currency trading.

Every trader needs to find the best Forex trading strategy that suits their trading style, as well as their risk tolerance.

A successful strategy is one with which traders can focus on eliminating losing trades and making other winning trades.

Forex trading strategies can be manual or automated methods of generating trading signals. Manual systems involve currency traders sitting in front of a computer screen, looking for trading signals and interpreting whether to buy or sell. Automated systems involve the development of an algorithm that finds trading signals and executes trades on its own. These latter systems take human emotion out of the equation and can improve performance.

Forex traders in the Kenyan market should be careful when buying off-the-shelf forex trading strategies as its track record is difficult to verify and many successful trading systems are kept secret.

The three main things to consider are:

  • Choosing a time frame that suits your trading style is very important. If you are a trader who wants to benefit from smaller market movements, you should focus on the shorter time frames, for example 1-15 minute charts. Swing traders will likely use a 4-hour chart, as well as a daily chart, to generate profitable trading opportunities.
  • When choosing a strategy, you need to decide how often you want to open positions. If you are looking to open a larger number of positions, you should focus on a scalping trading strategy, but traders who can devote more time and resources to analyzing macroeconomic reports and fundamental factors can spend less time in front of the charts.
  • Successful trading strategies require you to know your risk sentiment and find the appropriate trade size. Risking more than you can lead to bigger losses. It is best to set a risk limit for each trade.

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Three successful strategies are:

scalp

Forex scalping is a popular trading strategy that focuses on smaller market movements and involves opening a large number of trades with the aim of bringing small profits for each one. scalp is popular in Forex due to its liquidity and volatility and investors seek markets where the price action is constantly moving to capitalize on fluctuations in small increments. It requires a lot of time and attention, because you have to constantly scan the charts to find new trading opportunities.

Trades of the day

Trades of the day involves trading currencies in a trading day and is primarily used in Forex. Day traders primarily use the 30-minute and 1-hour time frames to generate trading ideas and often base their trading strategies on the news.

Position negotiation

Position trading is a long-term strategy and primarily focused on fundamental factors. Position traders typically monitor central bank monetary policies, political developments and other fundamental factors to identify cyclical trends and may only open a few trades over an entire year. Profit targets in these trades can be a few hundred pips per trade.

Conclusion

Kenyan forex traders need to find the best Forex trading strategy that suits their trading style, find a preferred timeframe, desired position size and number of trades they are looking to open.

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