10 Best Forex Trading Strategies.
Forex market is something that attracts people to come and trade and earn money. And should have a proper strategy before entering the forex market.
Strategies (plan) are something that defines your path of doing something. Without a strategy, it is very tough to survive in the forex market.
Forex Market is a place where all the currencies traded. It includes Dollars, Euro, etc. Forex market is also known as FX, Foreign Exchange or Currency Market.
Forex is one of the most traded markets in the world. Foreign Exchange Market includes buying, selling and exchanging currencies at current or determined prices.
Foreign trading strategies are the techniques that the forex trader uses to understand when to buy or sell the currencies. Forex trading strategies can be based on technical analysis or fundamental news events.
Having proper strategies gives trader confidence to buy or sell currencies pair.
As we know, the forex market is a decentralized global market where all the currencies traded. The forex market is the largest, most liquid market in the world. An average trading volume exceeding $5 trillion.
There may be two kinds of trading strategies, manual or automated method to generate trading signals.
Manual method is like a trader is sitting in front of a screen and interpreting whether to buy or sell after seeing a trading signal.
The automated method is like trader develope an algorithm and that finds trading signals executes a trade on its own.
the trader should exercise the caution when purchasing the off-the-shelf forex trading strategies. Because it is very difficult to verify their track record as many time trading systems are kept secret.
10 Best Forex Trading Strategies
10 Best Forex Trading Strategies are:-
Fibonacci Pivot Trade: Fibonacci Pivot Trades combines Fibonacci retracements and extensions with daily, weekly, and even yearly pivots.
1-hour Trading Strategy: In this strategy, you can take advantage of an hour time frame strategy. The easiest currency pairs to trade using this strategy are EUR/USD, USD/JPY, GBP/USD, and the AUD/USD. You would need a 100-pip momentum indicator and indicator arrows; both which are available on Meta Trader 4.
Bolly Band Bounce Trade: The Bolly Band Bounce Trade is great in a ranging market. Many traders use it with confirming signals.
Counter-Trend Strategies: This strategy relies on the fact that most breakouts don’t develop into long term trends. Therefore a trader using this strategy seeks to gain an edge from the tendency of prices bounce off previously established highs and lows.
The Drop ‘n’ Stop Trade: The flip side of the pop and stop. This strategy trade savage breakouts to the downside.
The Bladerunner Trade: It’s an EMA crossover strategy. It is a trending strategy that tries to pick breakouts from a continuation and trade the retests.
Forex Dual Stochastic Trade: This uses two stochastic – one slow and on fast – in combination to pick areas where the price is trending but overextended in short term retracement, and about to snap back into a continuation of the trend. In this, you get a chance to get profit in the stochastic signal.
4-Hours Forex Trading Strategy: This strategy uses a 4-hour base chart to screen for potential trading signals location.
London Hammer Trade: The time to use this strategy is when the price is taking off in one direction.
The Bladerunner Reversal: It effectively picks entries from a situation where the trend reverses the price begins to trade on the other side of the EMA’s.
Important Changes For Your Forex Trading Strategy
It is important to know when to change the current strategy. By the time, every strategy becomes less effective.
Everything has its time to last long. If the trader is following rules of the strategies then the strategy will do well. But it is not necessary that if it’s doing well, it will always do well. There will be a time when it won’t be that much effective.
So if any forex trading strategy does not work well and not giving you the result that you want, you should think to change it.
If you want to change the forex trading strategy, you have to keep certain things in mind which are;
- Many times strategy is complex and good but the trader doesn’t understand that. So it is better to change it.
- If the strategy which you are having is not giving you the results which you are supposed to get or expected to get then its time to change it.
- Sometimes, a particular strategy may depend on market trends. So if the Market trend changes, the strategy may become obsolete.
Components To Create Strategies
Whenever a trader comes to trade in the market. they first try to start with a simple strategy. Like if they are seeing some sort of movement in specific currency pair.
Or they may notice that a specific currency pair rebound from particular support. Then they may decide to add some components that improve the accuracy of these trading signals.
Some of the useful components to an effective forex trading strategy;
- Market: The trader must decide what currency pair there trade and become good at reading those currency pair.
- Position: Trader must know how large each position is to control for the amount of risk taken in each trade.
- Entry Points: Trader must know where to enter a short or long position in a given pair.
- Exit Points: It’s also important for a trader to know when to exit position from a given pair.
- Trading Tricks: A trader should have some tricks to do well in the market. Like a trader should know when to buy or sell any currency pair.
Benefits Of Own Strategies
Every day so many people come to trade in the market. Some people taste success or some people lose. People who are successful, are having something that others don’t have.
This kind of people has some kind of strategies which help them to analyze the market trend and help them to achieve things that they wanted.
Every strategy is having different elements and people may create their own strategies to trade in the market.
Security: Having your own way of doing things is good. So it is good to develop the right habit of trading. Copying someone’s strategy can get you into trouble.
If someone is doing the wrong things then it will harm your trade as well. So its better have to have own strategy.
Control on Trade: If you are following your own strategy, then you will have full control over the trade. Which is not possible if you are following other strategies. You can modify your own strategy as per the market trend.
Sustainability: Following someone else strategy is an unsustainable plan. If the strategy fails to analyze the trend then you will also face the consequences of that.
If you are a beginner and want to try money in the stock market. So you can read our post on Basics Of Share Market.