This article tells you about what factors you should account for when you select an ideal Forex trading strategy. Learn it and choose your system among 7 innovative strategies.
How to choose the best possible trading strategy?
Before you start your work on financial markets, find a trading strategy that would answer your needs. Which factors should you take into account in this task?
How much time you are ready to devote to Forex daily;
How much profit you want to make;
Acceptable rate of risk;
Trading instruments and method of analysis.
If you are short of time, your choice is a middle-term or long-term strategy.
If you are ready to work on a full-time basis, apply intraday trading systems.
Features of middle-terms and intraday trading strategies
When you use middle-term and intraday trading strategies, take into account following features of Forex trading strategies:
• Semi-automatic systems help to track each move of charts, which does not allow you to miss a potential profit;
• Open trades of a high quality. At present, profitable Forex strategies are not necessarily related to Close trades. Be a successful player, opening trades of a high quality with several instruments at once.
• Emotional control is more efficient once it is ensured by the trading system.
• Modern trading systems for currency trading perfectly fit for operations with spot metals as well.
What are 7 innovative Forex trading strategies?
1. Moving average underlies the most part of Forex trading options. An average price for a certain time frame is the base for calculation. Moving Average indicator accounts for all movements of price.
2. It can be a surprise, but the most risky trading option – scalping – ranks second in the rating of Forex strategies.
This approach has a variety of types and almost all traders try to earn as soon as possible. As a rule, a few traders choose scalping as their core strategy, because enthusiasm disappears after the first loss of deposit. Soon after a trader starts to search less risky trading options.
3. Trading levels – there is a vast number of trading levels. Some prefer to trade on the levels of support and resistance, other take Murray levels as their option. Your choice will depend on how skillful you are and other factors.
4. Channels – can perform as your core strategy either assist your operations. For example, when you trade on scalping, you can build a price channel to find entrance points better.
5. Intuitive trading is for beginners or eccentrics using moon phase, alignment of stars or other guides as their Open signals.
6. Bill Williams strategies apply Alligator indicators or fractals.
7. Martingale is rather a tactical solution, but, to some traders, it forms the basis of work.,
Advantages of day trading
Trading on day charts is much easier than using intraday charts. It is the best choice of those who are familiar with the economic situation very well. On day charts you may find 2-3 trends a year which can set your trading for a long time. Profit significantly exceeds risk on day charts.
Here you can set Take Profit which is 7-8 times bigger than Stop Loss level.
As a rule, strategies based on day charts do not apply indicators. Influential macroeconomic data can act as Open signals. For instance, decline of the interest rate by the European Central Bank would support European economy. Being aware of this fact, you can forecast consolidation of Euro against other currencies in a long run.
Forex strategies without indicators
Forex strategies without indicators can be applied for almost all time frames. They suit creative people who will be happy to find Head and Shoulders, Double top and other figures on their charts. If you manage to assemble mosaic, it can be a good prompt for your decision whether to open a trade.
ntraday Forex strategies
Profit potential of Intraday Forex strategies is higher than potential of day charts. But you have to be more careful conducting analysis here. Release of macroeconomic indicators create strong movements. However, all other time trades of market player play the most important role. Standard indicators won’t fit such trading. Here you must witness volume of current trades and track for advantage of buyers or sellers. This style is for those who are ready to handle a good deal of digits.
Some people call scalpers elite traders. Name of this strategy is given after the word “scalp” which is taken by a trader from market.A scalper’s task is to enter the market, take 10 -20 pips and leave the trade. In this strategy indicators can be used, but professionals do not apply them. The day rich with market news is ideal for scalping cause leaps give scalpers a chance to earn.
As for risk rate, often it runs beyond control. Scalpers often do not set Stop Loss and close trades right after it moves in a wrong side
Useful advice for working with strategies:
Planning your trade. Money management in your Forex strategy contributes to increase of return. With the help of money management you set: volume, Stop Loss and Take Profit, number of open trades.
Control your emotions. Trader’s psychology is extremely important, because beginners close profit too early and keep loss-making trades for a too long time. Moving Stop Loss when price moves against you is also a mistake.
3. Record all the trades you make. All successful traders keep statistics of their trades. It is crucial for beginners and experienced players.
We introduced you to the main Forex trading strategies and rules you need to follow to be a successful trader. We hope that this article will bring you closer to the profit of your dream.