Successful Forex trading involves minimizing the risk of losing money and maximizing winning opportunities as much as possible for euro traders. Ordinarily, traders achieve this by incorporating verified trading strategies. Using a proven trading technique makes it harder for a trader to lose money when trading, although losing trades will always be part of the trading landscape.
Many forex traders depend on unreliable and untested trading strategies, and that’s one of the reasons they run a high risk of losing. The truth is that traders can spend plenty of time on the internet searching for the proper technique and have no luck finding a reliable one.
Due to this, the solution is to try what are generally considered to be consistent strategies and find out what works. Listed below are the top 3 simple EUR USD trading strategies.
Overview of Forex Trading Strategies
In simple terms, a trading strategy in forex defines a system used by traders to indicate when to buy or sell specific currency pairs. Several types of strategies, such as fundamental analysis and technical analysis, exist. All in all, the most profitable trading technique is the one that lets you study the market and execute trades with the least possible exposure to drawdown and losses.
Who are Euro Traders?
They are traders who focus on the Eurozone’s economy compared to its leading partners. According to Investopedia, the EUR USD pair is among the most liquid forex pairs worldwide. The broad price movement and tight spreads of the two currencies ensure forex traders could potentially find more profitable opportunities.
While there are several techniques for trading the EUR/USD pair, three strategies stand out as being the simplest, most effective and consistent. The best news is that these strategies are helpful for all traders, irrespective of their trading skills.
Strategies for Trading the Euro
Here are the three simple strategies that traders can use when trading the Euro:
- Buying or Selling the Pullback
It is evident that the EUR/USD trend moves in both directions, in addition to moving the price from one level to the other in a positive feedback loop, which can create a significant thrust.
Nonetheless, this rapid fluctuation tends to vanish whenever the supply or demand equation changes. In such a case, latecomers will be stuck in positions that might be moving toward losses should the currency pair reverse and head towards the opposite direction.
Here is where the pullback strategy kicks in because it utilises this countertrend movement in recognising vital support or resistance levels. This way, it restores the initial trend movement and stops the price swing.
Traders ought to note that these levels come at prior lows and highs and the critical levels defined by moving averages, Fibonacci retracements, and the original movement’s inception point.
- Buying the Breakout and Selling the Breakdown
It is common for a specific currency pair to move back and forth within defined boundaries for long periods. In this case, traders can set up comprehensible trading ranges, which timely yields high, low, or new trends. Investors who patiently manage this consolidation phase and use a low-risk trading performance will have a strong selloff or rally once the support/resistance breaks.
Timing is vital for the successful implementation of this strategy. Traders should get the timing correct at all times because an early entry may hold the range and trigger a reversal. A late entry, on the other hand, increases the risk because the position executes well below the new resistance or well above the new support.
Therefore, it is essential to minimise the timing risks by triggering a partial position whenever the currency pair breaks out or down. Also, include it in the first minor retracement.
- Enter the Narrow Range Patterns
The currency pair will frequently rise or drop into a huge barrier and then become inactive, which leads to the creation of narrow range price bars that increase apathy levels and decrease volatility. What this does is that this quiet interface marks a strong, powerful entry signal for a breakdown or breakout.
This forex strategy enters the position within the narrow range pattern and integrates a tight spot to handle major reversals. This setup usually creates an NR7 bar that marks the last seven bars’ closest range price bar.
Initially utilised in the United States futures markets in the 1950s, this powerful and straightforward trading pattern projects whether the price bars will increase in a sizeable breakdown or breakout. The good thing about this method is that it is a low-risk entry because traders can configure the stop loss as close as possible to the entry price.
The Price-action Strategy for Trading the EUR/USD
First, the price action of this pair moves in an orderly manner, while the charts contain consistent patterns. The fact that it frequently trades in clear channels across various charts and timeframes means traders should closely monitor the perspective. The breakouts give significant trading opportunities, while the support & resistance levels hold.
The Best Time for Trading the Euro
Most traders find forex attractive due to the ability to trade all day long. Although it seems fantastic to trade throughout the day, it’s hard to be successful in this industry by trading 24 hours a day. Commonly, the trick is to know the pairs to trade and when to trade.
As a day trader, it is always sensible to trade on a forex currency pairing when the market has plenty of action and many volumes. Additionally, one needs to pick a pairing where the base or quote currency has high chances of doing well.
When trading the EUR/USD pairing, traders should recognise a window that provides sufficient volatility. Usually, when the
European market is open, traders invest most in the currency pairings comprising the GBP or the Euro.
Similarly, when the US and Canadian markets are open, CAD and USD pairs are highly active. As a result, the ideal time to invest in the EUR/USD is when either the American or European markets are open.
When the two markets are open, there are high chances that traders will actively trade in these pairs. In the end, the best time for trading this pair is any time when the trading window is open between 0300 hours and 1600 hours EST.
Tips for Beginner Traders
Beginner traders need to open a demo account to familiarise themselves with tight spreads, strategies, and platforms at no cost. The risks involved when trading with demo accounts are minimal because one gets a chance to enhance trading performance and skills without committing funds.
Currently, Tixee gives forex traders a chance to sign up for a trading account within a couple of minutes. Nonetheless, it is worth noting that most trading accounts lose money by failing to use the simple strategies described above. All traders need to set their own risk management preference and never over commit themselves.
Tixee – The Best Platform for Trading the Euro
Tixee is a licensed and reliable trading platform that allows traders to invest in currencies, indices, crypto-assets, stocks, and commodities. Tixee offers newsfeeds, demo accounts, strategies, and crucial education and research materials to help customers enjoy a seamless trading experience.
Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.
Risk Warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved.