Most trading strategies use Technical Analysis, but some use Fundamental Analysis. The following are various trading strategies that are commonly used:
NEWS TRADING Trading using news. Traders can profit by anticipating or trading in response to the impact of economic events.
MACRO TRADING This type of trading relies heavily on Fundamental Analysis. Traders will look at fundamental economic indicators (i.e. macroeconomic data) to try to understand the strength of a currency relative to other currencies.
CARRY TRADE Carry trade tries to get profit by taking advantage of differences in interest rates between countries. Typically, currency bought and held overnight will generate bank interest in the country in which the currency was purchased. Traders can search for the currency of a country with a low interest rate to buy the currency of a country that pays high interest rates, thus benefiting from the difference.
SCALPING In this trading strategy, the trader opens multiple trading positions and tries to get a small profit from each trade. Scalping is one of the fastest trading strategies. Scalpers strive to hold their position for a short time, thereby reducing risk.
DAY TRADING Day trading is perhaps the most well-known trading strategy. Day trading, as the name suggests, is a method of buying and selling within the same day. Positions are closed on the same day they are taken, and no positions are held overnight.
