Top 7 Forex Trading Strategies for Beginners

Momentum trading strategy

Momentum trading focuses on the strength of a trend, not just the trend itself. This strategy is based on the notion that if a trend is strong enough, it will continue in the same direction (either upward or downward).

If you want to use this strategy, you’ll open your position when the trend gains momentum and close it when the trend starts to slow down. To determine momentum, you need to consider volume, volatility and timeframes.

Indicators popularly used for this strategy are the momentum indicator, RSI, MAs and the stochastic oscillator.

Lastly, market sentiment plays a big role in momentum. News and economic events, like interest rate announcements, can heavily influence forex prices. Often, a large number of traders enter the market when a trend is growing stronger – which means even more momentum.