Welcome to your guide on the basic strategies you should adopt when you are new to forex trading. Forex is an exciting market, but it can also be highly challenging for newcomers. These basic strategies will help you avoid some common mistakes and hopefully give you a better chance of success with your future trades.

Money management

It means taking all your available funds and putting them in one trade. If the trade works out well, good! You made a great return on your investment and can now add that money into another trade. This way, you don’t risk everything in one go, but there’s still the opportunity for significant gains. However, if that first trade doesn’t work out, you’ve still got 90% of your investment to use in another trade and could potentially make a significant return if the second one goes well.

It is known as diversification and spreads out your risk: it doesn’t matter how many trades you place. As long as they’re all using different strategies and techniques, this approach will reduce your overall exposure to any one market.

Bollinger bands

These are beneficial technical indicators that identify areas where price action is likely to be strong or weak. They look at recent trading history and plot two lines- an upper one and a lower one- forming a channel around the current price line. If we see the price bouncing off the lower band, we can assume that the market may be due for a bounce because it is oversold. It would be an excellent time to buy as we’d expect an upturn in price. However, if we see the price bouncing off the upper band, this suggests that the market is overbought and likely to continue falling: this would be a good opportunity to sell.

Trading range breaches

It is usual for price action to remain within one or more defined trading ranges rather than breaking out into new highs or lows. Although such trends are not immediately visible on your Saxo platform because their charts only show you closing prices, they’re still worth keeping an eye on as you’ll notice that breaks of these trading ranges often lead to significant moves in the market. Saxo broker Dubai has an excellent built-in trading range tool that alerts you when these breaks happen and allows you to see precisely how price reacted after each event: this can help us spot some quick and easy profits.

Pivot points

Saxo brokers offer an excellent platform for forex trading. It’s full of valuable features such as various technical indicators, news feeds and so on. One of those is Pivot Points. The idea behind this indicator is straightforward: it plots out a series of support and resistance lines based on previous highs or lows. If we see price action breaking through these levels, that indicates that a possible change in market sentiment is underway. Saxo trading platforms are beneficial here because they allow you to see the pivot point levels plotted on your charts just by pressing one of the buttons along the bottom right-hand side. It means that you can spot these levels without even using an indicator or doing any calculations yourself!

Channel breakouts

Although Saxo does not have this indicator available, it is still worth mentioning as there are plenty of charting services out there which will do the job for us. It works in the same way as when price breaks through a trading range except with channels. Saxo traders use two parallel trend lines instead of one to define when price movement may get ready to pick up momentum. Saxo makes it easy for us to spot when the price has broken out of this channel by simply highlighting any Saxo platform levels breached in red, making them stand out clearly against the background.

MACD

It is a trendy technical indicator and stands for Moving Average Convergence/Divergence, which tells us whether there is consistent buying or selling pressure within the market. Saxo Dubai employees often recommend that traders pay attention to the difference between the two moving averages on this indicator because brokers always quote it in fast-slow format (faster averaging period closing above slower averaging period). For example, if price action breaks through the fast average line but fails to break through the slow average, brokers say a bullish crossover occurs.