How To Trade With Eightcap

Why do you need to use Eightcap strategies?

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Deposit loss is a phenomenon that, unfortunately, haunts most beginners at the start of their journey. This is due to inefficient risk management, use of too high leverage, inability to control emotions, lack of adequate market analysis, a large number of open purchases in one direction, because of which it is physically difficult to be able to close all orders at a sharp market movement. But, of course, the first place on the list of reasons is occupied by an ill-considered trading strategy or its complete absence. In order to be successful when trading Forex, you need to clearly define the strategy you plan to follow. And Eightcap practically does not limit traders to their choice.

Trading strategies for beginners should usually have a minimum of indicators, long timeframes, the most accurate interpretation of signals and most importantly - minimal risk. With a strategy in place, you will surely know how to act in a given situation, which will allow you to avoid emotional decisions, control potential losses and stick to consistency in trading. The last point is very important to achieve long-term success on Eightcap.

Top Eightcap strategies

Moving average strategy

For most Eightcap clients, one of the most favorite and frequently used Forex trading strategies is the moving average strategy. All a trader has to do when using this strategy is add two averages - a fast moving (with a shorter period) and a slow moving (with a larger parameter) to the chart and wait for them to cross. When the averages cross, it signals the end of the trend and a possible trend reversal, which gives the trader a chance to open a profitable trade. If a shorter moving average crosses a longer one from top to bottom, it is considered a sell signal, as it may indicate the beginning of a bearish trend. Conversely, if a shorter moving average crosses a longer moving average from bottom to top, it indicates the beginning of a bullish trend.

Moving average strategy

50 pips a day Forex

50 pips a day Forex is considered one of the simplest trading strategies used to determine price movement at the beginning of the trading day without the need for extensive analysis and monitoring. This strategy is a day trading strategy on a one-hour timeframe. It can be applied to any currency pair with an average daily range of 100 pips or more, but it compares best with GBP/USD and EUR/USD.

The main plus point of this strategy is that it is completely based on the "set it and forget it" rule, as the user has no need to change the settings until the next day. However, this strategy is not suitable for daily trading for those who like to constantly monitor the market and make transactions with different currency pairs. There is also a profit limit on this strategy.

50 pips a day Forex

Breakout strategy

Breakout strategy is considered to be one of the most popular methods of Forex trading. It is based on finding moments when the price breaks through key support or resistance levels. This, in turn, signals a change in market sentiment and often leads to significant price movement in the direction of the breakout. When using this strategy, traders can set clear entry and exit points, which allows for effective risk management. As for the cons, when choosing the Breakout strategy, one should be wary of false breakouts, when after a short impulse the price reverses in the opposite direction and the investor is left with nothing.

Breakout strategy

Trend following strategy

This strategy is based on the postulate "Trend is your friend". Its main idea is to identify the trend of price movement in the market and enter a trade in the direction of this trend in order to make a profit. When implementing this strategy, traders, using various technical indicators/analysis tools, try to identify whether the market is moving up (uptrend or bullish trend) or down (downtrend or bearish trend). During a downtrend, the user should open positions on the downside of the market and capitalize on the market's decline. An uptrend is generally considered an indicator of a strengthening market and may indicate increased demand for the selected asset. If you have clearly identified an uptrend, you should look for good entry points and open a buy trade.

The main advantages of this strategy can be called: potentially high profits, ease of use and the ability to use a stop-loss to limit losses in case the trend reverses. But we should not forget about the disadvantages: delayed entry into the transaction, which can lead to the loss of part of the potential profit, false trend signals, in which the price temporarily moves in one direction and then quickly reverses, and the difficulty of identifying the trend.

Trend following strategy

Which is the best Eightcap strategy for beginners?

All the strategies that we have described above deserve the attention of beginners. However, the 50 pips a day strategy is considered to be the best strategy for beginner traders as it does not require any in-depth research or market analysis. Also, using this strategy allows beginners to avoid the problems associated with long-term positions, such as emotional strain and the need to observe the market for a long period of time.

But it is important to remember that regardless of the chosen strategy, a beginner should thoroughly study the market, master the important theoretical base, constantly improve his skills and practice on a training account before starting to work on a real account. As for the last point, the Eightcap website provides an opportunity to hone your skills on a demo account, which is available to users for 30 days. Eightcap trading signals also offer good opportunities.

Is Forex trading risky?

Yes, Forex trading without a doubt involves risks.

• The use of leverage. Beginners may not realize the dangers that this tool hides and lose their finances in a matter of minutes. Therefore, it is important to remember one simple truth: the higher the leverage, the riskier your trading becomes.

• Fraud. Unfortunately, the internet is full of unlicensed brokers who pursue only their own profit. Their main goal is to gain a trader's trust and empty his wallet. Therefore, before starting a cooperation, carefully double-check the information provided by the intermediary. As for Eightcap, over the years this project has won a dozen international awards and received licenses from the SCB (SIA-F220), ASIC (391441), FCA (921296), CySEC (246/14).

• Market risk. The Forex market is characterized by high volatility, so sharp price changes in a short period of time are not uncommon here. Especially this point is important for beginners to consider: in case of wrong and untimely trading decisions, volatility can lead to uncontrollable losses.

• Political and economic risks. Forex market is subject to the influence of geopolitical events, economic data and macroeconomic factors. Consequently, armed conflicts, the creation of new associations, the collapse of the state, which entails the subsidence of its currency - all this leads to a sharp change in exchange rates, which can shake the position of the trader.

• Technical problems. For example, platform malfunctions, problems with the internet connection, etc. can lead to the fact that the user simply can not open or close a position at the right time, which will negatively affect the results of trading.

And, of course, it is worth mentioning that haste, decisions made on emotion, thirst for fast money do not play into traders' hands and entail great risks in the form of a complete drain of the deposit.

Expert tips to improve your trading with Eightcap

Below, TU experts have provided some tips to help newcomers improve their performance:

• Develop a trading plan. Before you start trading, make sure you have a well-thought-out trading plan. If a trader does not have a trading plan, there is a 100% chance of losing money in the market in the long run. The basic elements of a plan include: trading goals, tools, trading times, risk levels, and entry/exit rules.

• Control your emotions. Trading is not about excitement, but about rational and well-considered decisions. Learn to put your emotions on the back burner when it comes to making trades.

• Manage risk. Use stop-loss orders, use only the amount you are willing to lose when trading, limit the use of leverage and, of course, do not stop learning, even if you think you already know everything.

• Stay informed. Monitor the latest news and events. This will help you in making informed decisions.

• Have realistic expectations. It is the thirst for quick money that often has unfortunate consequences for traders. They think that trading on financial markets is a proven scheme for instant wealth, but it is not. To reach a stable income, the user needs to put in a lot of effort and spend a lot of time.

• Do not ignore trends. Have you heard such a phrase as "Trend is your friend"? Well, trading against the trend is an unjustified risk, especially for a beginner. The trend is considered to be the main clue and guiding path for a trader. It is its observation that contributes to profit growth and guarantees successful trades.

• Use technical and fundamental analysis. Combine technical (studying past prices to predict future prices using various tools including indicators, chart patterns, etc.) and fundamental (studying economic and news data) analysis to make informed trading decisions. Understanding these two aspects can give you a better understanding of the market.

Final thoughts

In fact, there is no unambiguous answer to the question: "Which Forex trading strategy is considered the most profitable and effective for a beginner?". In this article, we've examined the most prevalent strategies tailored for novice traders, providing an in-depth exploration of the advantages and drawbacks of each to facilitate your decision-making process.

It can be difficult to find "the right" strategy the first time, so we recommend trying different trading systems on a demo account. At the first stage of trading do not chase profitability. Remember that now the priority is to gain experience, and the thirst for quick and easy money can turn out to be bad for you in the form of a complete drain of the deposit. And the main advice - believe in your strength. Only in this way you will be able to achieve success!