7 Easy Forex Trading Strategies for Dummies Explained by an Expert

You don’t need to be a financial whizz to implement Forex trading strategies. We’ll talk you through 7 easy Forex trading strategies that you can test with your demo account at CAPEX and implement in your daily operations.

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Extensive trading resources

At CAPEX, we provide plentiful market news, trading conditions, and an economic calendar, through to an extensive education platform for people learning to trade. We also provide tons of regular featured articles that educate our users about emerging market trends, ways to trade effectively, unique trading strategies, and general finance.

Our education resources include comprehensive courses on topics that you can practice in the demo trading account too, such as basic functionalities and advanced Forex trading techniques. New users can access the trading resources with ease from the tab located on the CAPEX homepage and you can access trading courses immediately and at no charge. It’s like an online trading school!

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Practice trading

We, at CAPEX, offer a fully featured demo trading platform that mimics the live trading platform perfectly. Forex traders can practice strategies, explore the platform, and make mistakes without risking any real money.

The CAPEX demo account is a perfect replication of the CAPEX WebTrader platform and follows the current markets in real-time. You can trade exactly the same way you would for real but use virtual funds instead. Better still the market values will be the same as the real markets, meaning you can experience real trading with absolutely zero risk. There really is no better way to learn to trade than with CAPEX.

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What is Forex?

It’s the most liquid and largest market in the world. With a daily turnover of over $6 trillion, Forex is one of the most popular instruments in the world for retail trading. You’ve experienced Forex before – maybe you purchased a product on eBay in a different currency, or went on a summer holiday where you needed to convert your cash into a local currency – so traders will have no problem learning Forex strategies.

The meaning of Forex

So what is Forex? Foreign Exchange is the exchange of one country’s currency for that of another – like converting US dollars to Australian Dollars. Many factors influence the valuation of a currency and with the right strategies, traders can turn a profit by trading different currency pairs. The Forex marketplace is one of the longest in the world too, 2nd only to the cryptocurrency market, with it being accessible 24 hours a day, 5 days a week. That means no Forex trading on weekends!

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CAPEX CFDs

We  provide access to the Forex marketplace in the form of CFD trading which includes the ability to apply 30:1 leverage. A Contract for Difference (CFD) is a way to trade foreign currencies without taking ownership of any currencies. CAPEX traders can implement the best Forex trading strategies to invest in the value of a currency and can profit by correctly identifying future price movements.

Leverage is the concept of borrowing funds to take a larger position in a Forex trade than your current capital would allow. We, at CAPEX,  would highly recommend testing the concept of leverage out in the demo account to gain a proper understanding of how it is applied and the effects leverage can have on the results of your trades. Whilst leverage can, indeed, dramatically amplify your gains, it can also amplify your losses too. Leverage is a terrific trading tool offered at CAPEX but it must be used wisely.

55+ Forex currency pairs and more

With 9 majors, several minors, and even unique exotic pairings, there are more than 55 different currency pairs to trade as Contracts for Difference on two CAPEX trading platforms. As each currency pair has its own particularities and responds to different economic events, you’ll have many opportunities to diversify your portfolio. Also, if you are new to Forex, we are the perfect partner to learn everything about this market. You can learn how to trade Forex in our CAPEX Academy, as well as how to trade every other instrument we offer at CAPEX, such as shares, bonds, commodities, cryptocurrencies, among others.

 

7 easy strategies for dummies

Trust us, there are a lot of strategies out there for Forex trading. Do all Forex strategies that work, work all the time? Unfortunately no. However, there are 7 Forex strategies that not only teach the fundamentals of Forex trading but are also among the most popular because of how easily they can be used to great success.

These 7 best Forex trading strategies are so simple, even a dummy can follow along. Remember, you can always jump onto your CAPEX Forex demo trading account to test any of the following strategies out, so that they have been perfected ahead of conducting live Forex trades.

Breakout

This is a strategy that will certainly suit  Forex traders of any level of experience. You’ll be looking for breakouts – basically attempting to predict when a form may be forming. This is a pretty important skill for new traders to learn. Often markets will range between the support and resistance levels in what traders call consolidation. When a market finally moves beyond this consolation range, it is called a breakout. It could be high or low and the trend doesn’t start until the breakout occurs.

To be successful with the breakout strategy, there are a few indicators that we at CAPEX offer to help. Try using a Moving Average Convergence indicator or a Relative Strength Index – all accessible within the CAPEX trading platform.

Fundamental analysis

A complex strategy that can be simplified with some key indicators. Fundamental analysis forms the backbone of a truly informed overall Forex strategy. This strategy involves conducting a thorough analysis of a country’s economy to determine whether the currency is under or overvalued. With this information, a trader can then predict how the currency’s value is likely to move in accordance to another currency.

A heads up for totally new traders – look for indicators such as retail sales, GDP, CPI, housing data, and industrial production. As you grow with experience, you’ll no doubt use even more economic performance indicators.

Trend trading

This strategy is very popular and pretty commonly implemented by Forex traders around the world. Traders of any experience level will certainly want to test this one out in the CAPEX Forex demo platform because it happens to be one of the easiest strategies to learn. Somewhat similar to the breakout strategy, trend trading involves identifying trends in either direction and choosing entry and exit points accordingly.

These points are based on the currency’s price within the trend and the trend strength indicator – as in how long will the trend last. Thankfully, there are tons of indicators for such a technique and they are available on the CAPEX Forex trading platform. Newbies can use volume measurements, direction indices, moving averages, and relative strength indicators to assist with this simple strategy.

Moving average crossover

For this strategy, traders will employ the simple moving average indicator available on the CAPEX trading platform. The simple moving average (SMA) is considered to be a lagging indicator because it uses older price data than most other strategies. This strategy uses a long SMA against a shorter SMA – for example 25-days vs 200-days.

Using a chart set up for these two time periods, you’ll notice that the short line will cross the long line – this indicates a trend. If the short line moves above the long line, then newer prices are higher than the older prices. In this case, we’d have a signal to buy as a bullish trend is suggested. Conversely if the short line crosses below the long line, we’ll have a signal to sell.

Range trading

Another very popular and oh-so-simple of the Forex trading strategies for beginners. Traders will be looking for very stable and predictable economies for this trading strategy. That’s because it’s based on the concept that a currency’s value will very often hold within a steady range that is highly predictable for some amount of time.

You don’t want any surprises during this strategy. Range traders try to repeatedly buy and sell at predictable high and low levels of resistance and support to earn a profit. There are plenty of trading tools available for these kinds of trades at CAPEX. Look out for moving averages, relative strength indexes, and stochastics.

Carry trade

To use this strategy, traders will need a basic understanding of interest rate differentials and thankfully there is a simple equation to calculate daily interest.

Daily Interest = Long Currency – Short Currency/ 365 x notional value

Don’t worry! You won’t need to complete the math yourself to implement this trade. Carry trading involves turning a profit through the interest rate differentials between the countries of a currency pairing. For example, many carry traders invest in AUD/JPY owing to significantly higher spreads than other currency pairs.

Basically, you’ll be looking to execute a trade by borrowing funds from a low interest rate currency and purchasing funds of a high interest rate currency – holding this position overnight and traders can earn the interbank interest rate of the buying currencies country. Hence why currency pairs with high spreads are so appealing to implementers of this Forex trading strategy.

Momentum trading

Momentum traders work on the basis that a momentum indicator in a particular direction is a sign that a price trend is strong and will continue for a longer period of time. This strategy works for predicting reversals too, since weakening momentum may indicate that a trend may turn around soon.

To conduct momentum trades, new traders will need to take into account both volume and currency prices. You’ll be using the most familiar charts known to new Forex traders – candlesticks and oscillators. Essentially, you will be trying to determine how long a trend will last in order to maximise your earning potential. This is one of those online Forex trading strategies that may be implemented immediately after another such as a breakout strategy.

 

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Best way to test Forex trading strategies

While no strategy is guaranteed to provide perfect results every time, a practiced one certainly has a higher chance of success than an unpractised one. To increase your chances of profitable trading, you should experiment with different of the best Forex trading strategies, and perfect your favourites without risking any of your capital.

The best way to achieve this is with the CAPEX Forex demo account. The demo trading account is free and is accessible from the moment you register an account at CAPEX. Enter the demo account to trade with $50,000 in virtual currency and test everything from using moving averages and candlestick patterns, to attempting momentum trading strategies.

The CAPEX Academy features trading videos that will improve your knowledge of Forex indicators and how to read candlestick charts like an expert. New traders can master the fundamentals and essential skills of Forex trading – acquiring the ability to understand and implement 7 of the easiest strategies for dummies with absolute ease. With experience and further practice, new traders will be able to even conduct advanced trading strategies in the future.

Conclusion – Trade CFDs at CAPEX

When trading Forex currency pairs at CAPEX it is a pretty good idea to approach with a game plan. The best Forex trading strategies increase an investor’s chances of correctly identifying the price movement of a particular currency and provide unique methods to take advantage of the mechanics of the global economy. We offertraders 7 vital and simple trading strategies that are proven to work when implemented correctly.

Download the CAPEX Forex trading app today and practice the best Forex trading strategies before making that first investment.

Forex Trading Strategies – FAQ

🤷 How many Forex trading strategies are there?
📈 How do I develop Forex trading strategies?
📊 Do I have to stick to just one of the best Forex trading strategies?
🎈 Does leverage play into a trading strategy?