Forex Strategies That Actually Work

Every trading manual or instruction insists that a trading strategy is necessary for successful trading. First of all, when y'all select your forex strategy you gain greater clarity of the trading process, which helps minimize trading risks.

Assisting Forex strategy is an teaching. A trader faces high risks without using whatsoever organisation or plan. If a trader follows it strictly, he/she will avert many mistakes. The marketplace is difficult to predict, and it often results in trading mistakes.

Your forex strategy will tell you what y'all should do in various child-bearing market place conditions. Your trading strategy should be suited for any situation.

Yous won't endeavour to guess when to enter or leave a trade. Your trading strategy will prompt y'all when you lot need to enter or exit the market. Information technology doesn't hateful that even the all-time forex trading strategy tin't be changed. Merely information technology mustn't contain whatsoever unjustified elements.

The article covers the post-obit subjects:

• Types of forex trading strategies
• 3 nearly profitable Forex trading strategies
• FAQs

Types of forex trading strategies

Trading strategies can be based on various tools. The most pop trading strategies are:

• Trading strategy based on technical indicators
• Trading strategy based on Bollinger bands
• Trading strategy based on moving averages
• Trading strategy based on technical analysis and price patterns
• Trading strategy based on Fibonacci retracements
• Candlestick trading strategy
• Trend trading strategy
• Flat trading strategy
• Scalping
• Trading strategy based on the fundamental analysis

Three most profitable Forex trading strategies

Important! These strategies make upward a ground to develop your own forex trading strategy. The suggested setting and recommended levels to put pending orders are nix more than a recommendation.

If you lot practise non similar the backtesting or the performance on a real business relationship, the strategy may not be a fail. You lot just need to find individual parameters for indicators suitable for a particular asset or a current market situation.

• Note! The clarification of each strategy contains its template with indicators and a brief pedagogy for their installation. At the end of the article, there is a divide section devoted to practical recommendations. It explains how to launch these templates in real trading and start making money with LiteFinance! If you are interested in a strategy, open a demo account with LiteFinance, and follow the recommendations given in this overview. If you accept whatever questions, feel free to ask them in the comments!

i. Scalping strategy "Bali"

This strategy is quite popular, at to the lowest degree, you can find its description on many trading websites. Nonetheless, Internet resource suggest different recommendations apropos the Bali trading strategy.

According to the developer, Bali is a scalping forex strategy, or at to the lowest degree, it is designed for brusk term time frames. It is likewise skillful for twenty-four hour period trading. It suggests quite short stop losses (SL) and have profits (TP). Nonetheless, the recommended timeframe is rather long, and then, signals are sent quite rarely.

The developers recommend using the H1 timeframe and the EUR/USD currency pair.

Indicators used:

• Linear Weighted Moving Average. Period 48 (red line).

Linear Weighted Moving Average serves hither as an boosted filter. As the LWMA attaches more importance to the most recent toll moves, there are almost no delays in the long-term timeframes.

Occasionally, the LWMA may transport an early bespeak in the long run. But this strategy considers merely the MA position relative to the price movements. If the LWMA is below, it is a buy signal. If the line is above the cost, it is a sell signal.

• Trend Envelopes V2.  Period ii (orange and blue lines).

The indicator is also based on Moving Average, but it has a different calculation formula. Its layout is more authentic (the price noise is reduced).

Information technology allows y'all to place the breaks in the trend a fiddling earlier than the ordinary MA. Trend Envelopes has an interesting property. The line'south color and its location changes when the toll breaks through its former trendline. Information technology is a kind of trading signal.

• DSS of momentum. The settings are in the screenshot beneath.

The indicator is displayed in a separate window nether the nautical chart. This is an oscillator that identities trend pivot points. Information technology does it quicker than standard oscillators.

It has two lines: the signal line is dotted, the additional line is solid. But the receiving line has ii types of colours (orange and green).

• Important! Note that the indicators in the Bali trading strategy are selected so that they provide an early point purchase and sell. This gives a trader more than time to confirm the marketplace moves and bank check the key factors.

MA is a standard MT4 tool, the residue two indicators tin be obtained for free in the annal via this link. To add them to the trading last, in MT4, click on the "File – Open data binder". Next, follow the directory MQL4/Indicators. Past the indicators into the binder and restart the platform.

Conditions to open a long position:

• The toll breaks through the orange line of Trend Envelopes upside. At the same candlestick, the downwards orange line changed into the ascension blue line.

• The candlestick is above LWMA. When the previous condition is met, await the candlestick above the MA to appear. The candlestick must close higher up the reddish line of LWMA. There must exist the blue line of Trend Envelopes at the signal candlestick.

• The boosted line of the DSS of momentum at the indicate candlestick should be green. This line must exist above the indicate dotted line (that is, it is breaking it through or has already broken).

Enter a trade when the signal candlestick closes. I recommend setting a stop loss at a distance of 20-25 points in iv-digit quote. A take profit is xl-l points.

The arrow points to the point candlestick where Trend Envelopes colours alter. Annotation (majestic ovals) that the bluish line is below the orange and is moving (otherwise the signal should be ignored). At the signal candlestick, the greenish line of the DSS of momentum is above the dotted line.

Conditions to open a curt position:

• The cost breaks the blue line of Trend Envelopes downside. At the same candlestick, the rising blue line changes into the falling orange line.

• The candlestick is below LWMA. When the previous condition is met, wait a candlestick to appear below the moving average. Information technology must close under the red line of LWMA. There must orange line of Trend Envelopes at the signal candlestick.

• The DSS of momentum boosted line should be orange at the bespeak candlestick. It should exist located below the signal dotted line (that is, it is breaking through it or has already cleaved).

A few cases when you shouldn't enter a trade:

one. The below screen displays a candlestick that closed at the level of MA (the red line), almost fully below the line.

2. The below screen shows that the DSS is beneath its signal line at the signal candlestick. Too, the blueish line is apartment, not rising.

Signals are relatively rare, yous can expect for i signal for a few days. In fifty% of cases, yous'd better monitor the merchandise and go out it before, earlier the cost hits the take profit. Do non merchandise when the market is flat. Examination this strategy direct in the browser and assess the performance.

2. Candlestick strategy "Fight the tiger"

This is a profitable weekly trading strategy, which can be used for position trading with different currency pairs. Information technology is based on the springy action of the cost — if the price rose quickly, information technology should fall sooner or later on.

We can use a chart in any terminal and a timeframe W1 (although you can also employ a daily timeframe). You should analyze the size of the candlestick body of dissimilar currency pairs. There is a wide range of pairs: AUDCAD, AUDJPY, AUDUSD, EURGBP, EURJPY, GBPUSD, CHFJPY, NZDCHF, EURAUD, AUDCHF, CADCHF, EURUSD, EURCAD, GBPCHF.

Next,  choose the pair with the longest distance between the opening and closing prices within the week.  Y'all will enter a merchandise on this pair at the beginning of the next week.

Conditions to open a long trade:

• The bear candlestick, indicating the price action for the previous week, has a relatively big torso.

You enter a long merchandise at the commencement of the next week. Y'all should set a terminate loss at a altitude of 100-140 points and a take turn a profit - at fifty-70 points.

In the center of the calendar week, exit the merchandise. It may be closed with a take turn a profit or a finish loss. Then, again expect the beginning of the week and place a new guild. Practice not place orders at the terminate of the week.

It is clear from the chart that, following each bearish candlestick, there is always a bullish ane (although it smaller).

The matter is that what period you should take to compare the relative length of candlesticks. Information technology is individual for each currency pair.

Note that some small bear candlesticks were followed by rising candlesticks. Even so, according to take a chance management, you shouldn't open up a counter-trade (a long trade). The relatively small-scale fall, occurred in the previous week, may go on.

Conditions to open up a short position:

• The bullish candlestick, indicating the action during the previous week, has a relatively big trunk.

Open a curt position at the beginning of the next calendar week.

Red arrows point to the candlesticks that had big bodies relative to the previous bullish candlesticks. All signals were profitable except for the trade that is marked with a blue merchandise. The disadvantages of the strategy are rare signals, although the percentage of turn a profit is quite high. And yous tin can launch the strategy trading multiple currency pairs.

This strategy has an interesting modification based on similar logic. Investors, day traders, working with a trading volume prefer intraday strategies. They do not have enough money to make a strong influence on the market place.

And so, if in that location is a strong market place activeness in the weekly chart, this point the pressure fabricated by big traders. Differently put, if in that location are three weekly candlesticks in the same direction, the quaternary candlestick should be in this direction too.

The psychological factor is also important here. 4 candlesticks are equal to the period of one month. Those, who have been pushing the market in one management, should starting time taking the turn a profit in a month.

Strategy principle:

• In that location is a "three candlesticks" (rise or falling) blueprint in the weekly nautical chart.

• It is expert if the side by side post-obit candlestick is bigger than the previous one. Doji candlesticks (candlesticks without bodies) are non taken into business relationship.

• A end loss is ready at the close level of the starting time candlestick in the sequence. The take profit is fifty%-100% of the concluding candlestick, but it is frequently ameliorate to exit the trade manually.

An example of such trade setups is in the screenshot below.

four patterns out 5 are profitable. The strategy's drawback is that you can wait for a pattern for quite a long period of time. It tin can take 2 or iii months.

Merely if you launch the strategy on multiple currency pairs, this term of expectation is justified. Take swaps into business relationship!

3. "Profit Parabolic" trading strategy based on a Moving Average

The strategy is referred to as a universal one, and information technology is often recommended as the all-time Forex strategy for consistent profits. It employs the standard MT4 indicators, EMAs (exponential moving averages), and Parabolic SAR that serves as a confirmation tool.

This is a tendency strategy. Nearly sources suggest using information technology in different timeframes, including minute ones, merely market place noise lowers its efficiency in very short timeframes. Information technology is better to employ timeframes of М15-М30. You can trade any currency pair, just you may need to custom indicators' settings.

Indicators used:

• EMA with periods five, 25, and fifty. ЕМА (five) is red, ЕМА(25) and ЕМА (50) are yellow. Apply to – close (closing prices).

• Parabolic SAR. Get out the default parameters (you lot can only adjust the colour if you lot desire).

• Parabolic SAR. Go out the default parameters (yous can merely adjust the color if you lot want).

Conditions to open up a long position:

• Red ЕМА (5) breaks through the yellowish ones from beneath.

• Parabolic SAR is below the candlesticks.

Conditions to open a brusk trade:

• Ruddy ЕМА (5) breaks through the yellow ones from above.

• Parabolic SAR is above the candlesticks.

Y'all can enter the merchandise at the same candlestick when the moving averages have crossed. A stop loss is set close to the local depression, take profit is 20-25 points. But if you manage trades manually, you can make a bigger profit.

For instance, you can exit the trade when ЕМА(5) becomes flat. Information technology indicates a modify in the slope from a ascent to a flat.

It is clear from this screenshot that all the three signals (two longs and one short) yielded profit.

One could have entered the merchandise at the next candlestick. Information technology is after the signal one (to be sure in the trend direction). However, a good entry point would take been missed.

It is upward to you lot whether to hazard or not. These parameters will hardly work for hourly timeframes. Therefore, you should always test the indicators' performance for each timeframe using a catamenia of at least three years.

Well, you lot are familiar with the theory now. I desire to briefly describe how to launch these strategies in real trading.

Are you ready? Let'due south go down to real trading in the Forex market place!

From theory to practice

Stride 1. Open up a demo account. It is free, you practice not have to height up the deposit. It takes about fifteen minutes and doesn't require verification.

On the website dwelling house page, there is the Registration button. Click on it and follow the instructions. You lot tin can likewise open up an account in other menus. For case, in the upper menu, trading atmospheric condition for an account, and then on.

Stride ii. Study the functions of the trader profile. It won't take much time. It has a user-friendly, intuitive interface.

You demand to written report the instruments on the platform and find out how to brand a trade. The trader profile is described in this overview.

Step 3. Open trading platform. In the client space, there is a built-in terminal merely doesn't permit calculation any templates. And then, the strategies similar "Bali" or "Profit Parabolic" can exist launched only in MT4.

3.1 Trading with MT4:

• Go to the METATRADER tab in the customer's contour, you can download it via the link (run into the screenshot below).

• Download the template (just in case, I give the link again. The description of the strategy above explains how to set the template in the MT4).
• Try entering the trades co-ordinate to the descriptions of "Bali" and "Turn a profit Parabolic" strategies.

3.2. Trading with the congenital-in LiteFinance terminal:

• Adapt the chart visualization co-ordinate to the clarification of the "Fight the tiger" strategy (currency pairs, timeframes). Y'all can add indicators (add together some indicators you similar).

• Try to enter trades according to signals as it is described in the overviews.

Trading with LiteFinance is always efficient because:

• LiteFinance provides detailed descriptions of dozens of indicators and strategies. At that place are also the answers to your questions and the recommendations of professional traders.

• LiteFinance includes a professional trader blog, analytics, and a complex educational block. It provides all the necessary tools to develop your skills from a beginner to a professional.

• LiteFinance allows getting many pleasant bonuses and prizes, from the make new gadgets to a car or even a dream house! You can acquire more about the promotion here.

Attempt yourself! All you need is to just open a demo business relationship via this link. Follow the pedagogy, and discover the recommendations offered in this commodity. Believe in yourself and do not be agape of experiments!

Features of effective Forex strategies

And finally, let us see what features a assisting trading strategy has. What characteristics shout information technology have? I can ascertain the three almost important features of the effective trading strategy:

• Minimum lagging indicators. The less is lagging, the more than accurate is the forecast. Forex trading strategies that work must not have lagging indicators.

• Simplicity. It is very important to understand the main principles of your trading strategy. Information technology is better to be an skillful on the unproblematic strategy than to use complex strategies. It is very important to understand your forex trading strategy.

• Special features. A strategy should be adjusted to your trading style and methods, your personality, special circumstances, and and so on.

It is very important to develop your trading strategy. However, offset, you need to attempt many other strategies that have been developed and tested. In the Forex blog, you will find many working forex strategies that y'all can download for free. Before you launch a trading strategy, test the strategy on a demo account in the MetaTrader terminal.

Conclusion. To be a successful Forex trader, y'all should develop your own all-time profitable trading strategy.

Go familiar with the latest Forex trading strategies, develop and amend your trading plan. Following this simple didactics will allow you to be satisfied with your trading performance.

 I wish you successful trading!

FAQs

What is the best Forex trading strategy?

Here are three unproblematic and very effective Forex trading strategies.
1. Triangle Breakout strategy - 85% accurate.
2. EMA Breakout strategy - seventy% accurate.
iii. Trend Line Breakout strategy - 65% accurate.
Read more than here.

What are strategies in forex trading?

Forex strategy is a special technique or trading technique traders utilise to determine whether they should buy or sell a currency pair at a given time. Strategies based on technical assay require the utilize of indicators, while strategies based on cardinal analysis require business concern data and economic news. Hither is a library of Forex trading strategies with detailed examples of use.

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P.S. Did you like my article? Share information technology in social networks: it will be the best "give thanks you" :)

Ask me questions and comment below. I'll be glad to answer your questions and give necessary explanations.

Useful links:

• I recommend trying to trade with a reliable banker hither. The system allows you to trade by yourself or re-create successful traders from all across the globe.
• Use my promo-code BLOG for getting deposit bonus fifty% on LiteFinance platform. Only enter this code in the appropriate field while depositing your trading account.
• Telegram conversation for traders: https://t.me/liteforexengchat. We are sharing the signals and trading feel
• Telegram channel with loftier-quality analytics, Forex reviews, training articles, and other useful things for traders https://t.me/liteforex

The content of this article reflects the author's opinion and does not necessarily reverberate the official position of LiteFinance. The material published on this page is provided for informational purposes just and should non be considered equally the provision of investment advice for the purposes of Directive 2004/39/EC.

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Forex Strategies That Actually Work,

Source: https://www.litefinance.com/blog/for-beginners/trading-strategies/three-profitable-forex-trading-strategies/

Posted by: simmonshiondsheings.blogspot.com

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