A profitable Forex strategy is a kind of instruction for a trader, helping to follow a well-defined algorithm and protect his lodge from the aroused mistakes and consequences of the capriciousness of the Forex marketplace .
If you adhere to your forex trade strategy, you always know the answer to the motion – what to do in certain circumstances of the market. You have the terms of open of the transaction, the terms of its closure, you do not guess if the time is proper or not. You do as your trade scheme tells you. This does not mean that it can not be changed. A “ healthy ” scheme of trade in the currency market must be constantly adjusted, it must meet the realities of the current market trends, but there should be no unreasonable arguments in it .
Types of trading strategies
Online you can find descriptions of respective strategies, the manipulation of which allegedly guarantees a monthly duplicate of capital. “ Break-even ” strategies based on doubtful trade tactics are besides there in abundance. The most popular of them are the Martingale and averaging methods. The forms that a trading strategy can take can combine a diverseness of methods. however, there are a number of the most use options :
- Trading strategy based on several complementary technical indicators
- Bollinger Bands Trading Scheme
- Strategy on moving averages
- Technical shapes and patterns
- Fibonacci trading
- Candle trading strategy
- Trend Trading Strategy
- Flat trading strategy
- Fundamental analysis as the basis of the strategy
TOP 3 most profitable forex strategies
Scalping strategy “Bali”
This trade scheme allows deal on the H1 timeframe with a EUR / USD currency pair .
As assistants, you will need the Linear Weighted Moving Average ( period – 48 ), Trend Envelopes_v2 ( period – 2 ) and DSS of momentum ( parameters : 18.16, 3, 8 ) indicators .
The yellow line on the price graph will indicate the Trend Envelopes indicator. Determine the time when the following candle closes above this pipeline – the indicator will then be under the price of the instrument. At the same candle, the price will be at the close of the hour above the Linear Weighted Moving Average line. The independent line of the DSS of momentum index will be green on the graph, it should be located above the bespeak telephone line. A buy decree is opened when all these conditions are combined. then you set a discontinue loss at 25 points, and take profit – at 50 points. For sales transactions, the same conditions are “ turned over ”.
Candlestick strategy “All-bank”
This profitable Forex scheme is weekly and can be used on different currency pairs. It is based on the spring principle of price movement. For trade, you only need a chart in any terminal and a W1 timeframe .
You must estimate the size of the candle bodies of unlike currentness pairs ( AUDCAD, AUDJPY, AUDUSD, EURGBP, EURJPY, GBPUSD, CHFJPY, NZDCHF, EURAUD, AUDCHF, CADCHF, EURUSD, EURCAD, GBPCHF ) and choose the longest distance from the open to the close of the candle within of the workweek. This pair will open a deal at the beginning of the adjacent workweek .
If the candle was bearish, then the position will be long, if bull – short. Be certain to set a diaphragm personnel casualty of 100-140 points and a learn net income of 50-70 points. When the middle of the workweek comes, we close the decree if it has not yet closed by profit or stop. After that, expect for the begin of the workweek again and repeat the procedure, in no case opening the transaction at the end of the current week.
“Parabolic profit” based on the moving average
As you may have guessed, you need to set three moving averages on the chart ( 10, 25 and 50 ), arsenic well as the Parabolic indicator. For the appliance of further actions on the analysis of the schedule, you can highlight the lines of the skid in different colors. You will need Parabolic as a be active average signal filter. If you intend to open a bribe deal, beginning make sure that the Parabolic is at the bottom, if the position is short – the Parabolic should be at the top. so, we define the entrance luff by the demeanor of the slide with the parameter 10. It must cross the other two sliding – 25 and 50. If it does it from the bottom up, then it ‘s fourth dimension to open a long stead ( to buy ). If on the reverse – sell. For a stop loss, it is better to use a trail arrest .
Characteristics of an effective Forex strategy
And ultimately, let ‘s see, what makes a profitable Forex scheme different ? What are its integral and mandatary characteristics ? In my opinion the three most important features can be defined .
- The minimum number of lagging indicators. The fewer they are, the higher the accuracy of the forecast.
- Simplicity. The fact that you understand your strategy is more important than its saturation with complex elements, formulas, schemes.
- Uniqueness. Any trading strategy should be tailored to your trading style, your character, your circumstances and so on.
The trouble is that for most traders, cardinal analytics is limited to working with the economic calendar. Of naturally, some events have a short-run impact on the prize of the asset, but to predict the direction of the price nerve impulse in this case is about impossible. To successfully trade in the Forex market, create your own trade scheme. Get acquainted with the novelties, study cliched deal schemes and improve your individual carry through plan in the market. only in this case, the results of trading will satisfy you vitamin a much as potential. besides in the network there are much “ innovative ” automated trading systems based on artificial intelligence, with a profit potential of 300 % per month. But such indicators of profitableness are far from world. In fact, experienced traders, when using control leverage, do not earn more than 20 % per calendar month on trade. This rate of tax return can even be called outstanding. If there actually is an interest in such activities, then it is authoritative to take this fact for granted and not to chase the recipe of super-profits, since this leads to a loss of investment .