What are the most profitable forex strategies? Which Forex trading system should a beginner choose? What is the secret of successful Forex trading by professional traders?
Hello dear friends! Alexander Berezhnov with you.
This article is about Forex trading strategies. I myself have traded on FOREX for more than 3 years and in practice I became convinced how important it is to follow a well-defined strategy.
This article will help you understand the myriad of strategies that the Internet is replete with right now. I will describe the most popular of them and help you choose the best one, taking into account your individual psychotype of personality.
Are you ready for successful trading? Let's go then!
1. What are forex strategies and what are they for?
Imagine that you are entering a dark and unfamiliar room. If you do not turn on the light, you can bump into objects, fall, bump or break something. If you turn on the light, you can safely go around all the objects and get to the right place.
Forex strategy in this context is light. Applying it, we illuminate and "see" the market, predicting its movement.
Without a strategy, we are in complete darkness, make mistakes, lose money and see no further way. Now think about which is more profitable: stay in the dark or turn on the light? What is strategy?
Strategy is a developed system of rules that a trader must strictly follow when trying to increase his money in the foreign exchange market.
It allows you to confidently enter and exit the transaction, and not randomly open and close, ultimately losing all the capital on the deposit.
The strategy is like a traffic light: you always know that you are opening a trade on green, you are waiting on yellow, and you are out of the market on red, without even considering entry options.
Believe me, having a decent real deposit, the most difficult thing is to open a deal. The strategy immediately saves you from these hard thoughts: you just enter the market when you see a certain situation (signals). But what are these rules to open?
The rules for opening deals can be as follows:
- intersection of indicators set on the chart;
- the achievement of certain levels by the price;
- candle shape or candlestick combination;
- formation of familiar patterns (figures) by the graph and much more.
You can follow someone else's Forex strategy, you can combine them with each other, you can develop your own, based on many others. The main thing is its presence.
Testing of a trading strategy in the foreign exchange market is carried out exclusively on a demo account. Testing period: at least six months.
If in six months the strategy shows results that are suitable for you, you can use it on a real account.
Now some thoughts. If you don't have a strategy, then the number of losing and winning trades should be equal, right? But in practice, it turns out that haphazard trading catastrophically quickly leads to zeroing the account.
Paradox
If you purposefully try to drain the deposit, then you will not get much: it will decrease extremely slowly. But why is this happening?
The secret is simple: fixing small profits and large losses; buying where you need to sell and selling where you need to buy.
What is the conclusion? It should be as easy to trade profitably as it is to “drain” - you just have to follow the rules. If you are not yet experienced enough, then take your time. Before going directly to strategies, read the article.
It's easy to search for a market entry according to specific rules, but 90% of traders for some reason neglect to follow their strategy, leaving the market forever and losing the opportunity to be successful. I hope you want to enter the 10% of successful traders? - then let's go further.
2. What determines the choice of Forex strategy - 3 main criteria
So, you are aiming to apply a strategy. But there are a lot of even profitable Forex strategies. How to choose the right one for you?
Imagine you need to buy a TV. You know what it is and what you want. Where will you go to shop? That's right, to a store that sells consumer electronics.
But when you come to the store, you will find many models of TVs. Your task is to choose.
The TV you choose will be as good as any other model left in the store. It's just that it will be the TV with which you are most comfortable.
Do you think things are different in the Forex market? No, everything is exactly the same as in the example with the TV. We know that we need the most profitable Forex strategy, and now our task is to make a choice from the proposed options. And this choice will be no worse. It will simply be the strategy that interests you.
But you don't need to buy it - I have already prepared the most effective of them for you in this article.
There are only three criteria for selecting Forex strategies:
- Duration of holding open positions.
- Market analysis approach.
- Method for analyzing graphs.
Now more about each.
Criterion 1. Duration of holding open positions
Someone loves a marathon, and someone - a sprint. It's the same with strategies.
In accordance with this criterion, the following are distinguished:
- short-term;
- medium-term;
- long-term.
Below, I will tell you more about each type of strategy.:
- Short term. Suitable for experienced traders. Aggressive trading is assumed: about 100 trades can be opened per day. This also includes scalping and intraday.
- Scalping- suitable for traders with little capital. An open position can be held from 5 seconds to half an hour. Up to 200 trades can be opened per day. But bigger doesn't mean better. Among traders, scalping is considered one of the most difficult approaches to trading. Forex scalping strategies are used regardless of the direction of the price (short or long).
- Intraday is intraday trading. The trade opens and closes during the day. These strategies are simple, straightforward, suitable for all traders. Several trades can be opened per day for different currency pairs. Typically, this approach opens from 2 to 5 trades.
- Medium term. It will not do without knowledge of technical analysis. An open position can be held from 1 to 45 days.
- Long term. Such Forex strategies are suitable for both beginners and experienced traders. An open position is held for up to a couple of months, which allows observing the market in a calm mode and not worrying about the current state of an open deal. You don't have to sit at the monitor all the time, just open the chart once a day. With the correct forecast, the profit is significant (up to several thousand points).
Criterion 2. Approach to market analysis (fundamental and technical)
To predict the direction of price with the greatest probability, you need to know about fundamental and technical analysis. Someone naively believes that only one type of analysis can be mastered. Unfortunately, the market does not tolerate amateurishness. Do you want profit? Comprehend everything.
Fundamental analysis Is a forecast of price behavior based on news and the general economic situation in the world.
Why analyze news? It is the release of some important news that can lead to a sharp change in trend and price reversal, which you may not be ready for.
By importance, news is divided into 3 types:
- insignificant;
- important;
- The most important.
The basic rule of experienced traders is not to trade when important news comes out! Why? Because your stop orders (stop loss and take profit) will be triggered with almost 100% probability. The best way out is to close the position before the news comes out.
Technical analysis Is an approach to market analysis using price chart analysis.
This forecast is based on past market movements. Indicators, the price chart itself and its elements: candlestick patterns (bars) are used as analysis tools.
Technical analysis is well suited for short-term trading in a non-aggressive market.
Criterion 3. Method of analysis of charts (figured, indicator, candlestick)
Technical analysis comes down to three main methods of forecasting:
- By figures.
- By indicators.
- By candlelight.
Figured Analysis assumes visual detection of a figure (pattern) on a price chart and a clear knowledge of where the price will go next. The direction of the price is determined by exact rules that the trader must know.
There are two groups of well-established chart patterns (patterns): price reversal patterns and continuation patterns of the current trend.
Reversal patterns include:
- triple base;
- double base;
- double top;
- double base;
- head and shoulders;
- inverted head and shoulders;
- diamond.
The trend continuation patterns include:
- rectangle;
- pennant;
- flag;
- wedge;
- triangle.
Example. You have spotted a double top on the chart. This means that the price tried to break through the level twice, but failed. You just have to look for an entry point to sell.
Indicator analysis involves the installation of various technical indicators on the chart, which will give signals to buy or sell. An abundance of indicators may not bring profit, so you need to choose several that are suitable and understandable for you.
Experienced traders usually use no more than 2-3 indicators at the same time.
In total, there are two groups of indicators:
- oscillators;
- trendy.
Oscillators usually indicate a possible trend reversal and work great in a flat *.
Flat(from the word "flat") - this is a situation in the market when the price is in the corridor and does not have a pronounced direction.
Trend indicators follow the trend and work great when it is in the market.
But even the most famous and accurate market indicators are not the golden grail.
Remember two important rules:
- You will get the maximum profit when several indicators give you the same signals.
- No technical indicator can take into account the behavior of the market when important news is released!
Example
The Stochastic Oscillator is in the oversold zone. This means that it is impossible to sell more, we are considering only the purchase option.
Candlestick analysis involves the study of all the familiar Japanese candlestick combinations in order to determine the trend change or its continuation. Perhaps, candlestick analysis is the simplest and most straightforward.
Japanese candlesticks is a display of a chart in the form of rectangles, the body of which is painted in different colors depending on the type of candlestick. If the candlestick is dark, then the opening price is higher than the closing price. If the candlestick is not colored, then the opening price is lower than the closing price.
Using candlestick patterns, you can predict the continuation or reversal of the trend. See the picture below for an example.
Distinguish between bullish candles (their closing price is higher than the opening price) and bearish candles (the closing price is lower than the opening price).
Looking at a Japanese candlestick, you can immediately determine the mood in the market: in a given time frame (timeframe), buyers or sellers prevail.
Trading with Japanese candlesticks is convenient - you only need to find a familiar combination.
For example
We see a "Shooting Star" - a candle with a very small body, a long upper shadow and a small lower shadow. This candle immediately tells us what to sell.
Simple, isn't it?
3. How to choose the right strategy - 3 easy steps
I will say right away: the best Forex strategy is the one that is right for you.
I have been looking for my Forex strategy for about a year. At first, I practiced trading on simple and understandable strategies, gradually adding something of my own to them. This is how my strategy turned out.
Just pick and mix the ones that already work.
To choose your strategy, you will need:
- determine your psychological type;
- realistically assess your professional level;
- set how much time you will spend on trading.
Now about each item in more detail.
Step 1. Determine your psychotype (comparison table)
So let's find out who you are?
№ Psychotype Market behavior Optimal strategies 1 Sanguine He longs to earn money and puts all his strength into it. Consistent in trading, not upset about losses For a sanguine person, risk-reward-weighted strategies are suitable. 2 Choleric He wants to make quick money, cannot open long-term positions, he is in a hurry. Can quickly drain the deposit due to its haste and carelessness Trading on short time frames is not recommended, it is better to choose for yourself medium-term intraday trading on H1-H4 intervals 3 Phlegmatic person The most successful in Forex. Knows how to wait, makes informed decisions, is always calm Since the phlegmatic person treats trading with all responsibility, this psychotype has no limitations in choosing a suitable strategy 4 Melancholic Too inconsistent, overly careful, makes chaotic decisions Strategies with short stop losses and take profit are recommended Let's move on to the next step.
Step 2. Assess your professional level
It is clear that you cannot do without reading several books. Trading Forex without any knowledge is simply useless!
- Nassim Taleb - "Black Swan".
- Edwin Lefebvre - "Memoirs of a Stock Market Speculator."
- Eriy Nyman - Small Trader's Encyclopedia.
- Alexander Elder - "Trading with Dr. Elder".
These Forex books will help you understand the essence of the stock market game, risks and profitable strategies.
Step 3. Determine how much time you can devote to trading
Forex trading is available to everyone: from housewives to businessmen. It is possible to make money by devoting at least 1 minute a day, at least the whole day. There is no time limit.
For more productive and successful trading, arrange yourself a “no-trade day”. This means that on this day you don’t think about Forex at all, you don’t read thematic forums, books, you don’t talk about exchanges with your friends.
4. The best Forex strategies (FOREX) - an overview of the TOP 15 most profitable
So we got to the most long-awaited and "tasty" section. Here we will consider directly the strategies themselves with a detailed and understandable description of them.
Simple strategies for novice traders
These trading strategies are suitable for short-term and intraday trading.
Strategy 1. Moving averages
This Forex strategy is suitable for any currency pair. We will work on 2 timeframes:
- Weekly (W1).
- Four o'clock (H4).
The weekly chart is needed to determine the trend, and the four-hour chart is needed to open positions and find entry points.
On W1, set two moving averages: exponential (EMA) and simple (SMA). We take EMA with a period of 21, SMA with a period of 5. If the price chart is above two moving averages, then the trend is upward, and vice versa.
On H4, set two simple moving averages with a period of 55 and 7.
Rules. If we observe a downtrend on W1, then on H4 we consider only sales and ignore purchases.
There are two options for entering the market.:
- First option. When the lines cross from top to bottom, place a pending buy order exactly at the level of the moving average with a period of 55. If the level has moved, move the pending order as well. We are waiting for the price to open it. Stop-losses are placed at the previous local extremes (minimums and maximums).
- Second option. We are waiting for the intersection of the averages from the bottom up, and the candlestick closes above this intersection point. Now we open a buy order at the market. We set stop losses as in the previous version.
How to set take profit? Pull from the moving average with a period of 55 Fibonacci levels. In the settings, set only the following levels: 144, 233, 377, -144, -233, -377.
If we see a buy signal, open three deals (all have the same lot). The profit will be located accordingly on all these three Fibonacci lines. Do not forget to move the trade to breakeven (drag stop-loss).
Strategy 2. Three candles
This trading strategy is suitable for scalping. The trading timeframe is М1. Any currency pair will do.
Rules. We are waiting for the formation of two candles going in the same direction. It is better that they are without long shadows. After the third appears, we open. We use the Stochastic Oscillator (Stochastic) as an additional signal to enter.
For example, if three candles are going up and the indicator is pointing to a downtrend, then the trade is not executed. The signal to buy will be when the Stochastic is in the oversold zone.
Strategy 3. London session
This is perhaps the simplest Forex strategy. The trading timeframe is M30. Trading time - London session, which starts at 10 am Moscow time. Best suited for a pair with GBP. For example, for the popular currency pair GBP / CHF (British Pound / Swiss Franc).
Rules. Entry to the market is daily, but one-time. The closed first candlestick will be a signal to open in one direction or another. We place a pending buy order at its maximum, and a sell order at its minimum.
Stop loss is placed at the high or low of the same candlestick, depending on which order was opened: buy or sell. After the order is opened and the price passes 15 points, we set a breakeven.
We do not delete the second pending order. If the price reverses, you will still make money. In this strategy, you will either be in the black or go to zero. Thus, this Forex strategy is break even.
If important news comes out on this day, we do not trade!
Scalping strategies for short-term and intraday trading
Scalping offers large profits in a very short period of time. It is also associated with very high risks. If you are sure that you do not want to wait, but want to make money now, then this trading method is for you.
The technique is very simple and effective at the same time. Marat reviews the markets on a daily basis, which can be found on the broker's website in the "Training" section.
Strategy 4. Simple
For those who like to take risks, the scalping strategy in 1 minute will be to their liking. To work, we take the GBP / JPY pair and set the indicator on the price chart BollingerBands(Bollinger Bands) with parameters:
- period 50, Deviation 2 (red line).
- period 50, Deviation 3 (orange line).
- period 50, Deviation 4 (yellow line).
Rules. The optimal trading time is between the opening of the London session and the close of the Japanese session. Also, you cannot trade on the flat market during news releases.
Consider purchasing. We open when the price is between the orange and red lower lines. Stop loss is set depending on your personal percentage of losses in one trade. Usually this is no more than 3%.
The sale is carried out in the same way if a mirror situation is observed.
Strategy 5. Quick profits
"Quick Profit" allows you to use scalping in Forex efficiently, while remaining a simple strategy. Suitable for any currency pair.
We will work on a 1-minute timeframe, setting exponential moving averages (EMA), Parabolic SAR and MACD for analysis. We take EMA with periods of 25, 50 and 100. We take the other two indicators with standard parameters.
Rules. The best time to collect profits is the opening of trades in London and New York. We open a buy or sell deal when the price crosses all EMAs. Parabolic SAR and MACD will serve as filters.
If the price is going to cross all the EMAs from the bottom up, the Parabolic SAR is below the price, and the MACD histogram is going up, then this is a sure sign of a buy.
Take profit is no more than 10 points, since the price can reverse in the opposite direction. As soon as the price has moved away from the opened deal, transfer it to breakeven. Place your stop loss at previous local lows or highs.
Strategy 6. Outsiding
For the "Outsiding" trading strategy to work with a high probability of success, you must strictly follow all the points of the rules.
We work on М15 with the GBP / USD currency pair. You can try it on other instruments as well. Set the EMA with a period of 9 on the chart.
Rules. We consider only those candles that do not touch the moving average. An ideal candlestick is one whose minimum or maximum is located approximately 1 point from the indicator.
If we are considering buying, then the closing price of our signal candle should be higher than the previous high. Stop loss is placed below the minimum of the previous candlestick. We set the profit by the number of points of the previous candlestick. If the price has gone up sharply by 20 points, it is better to set a breakeven.
Trending strategies regardless of price direction
This group of strategies is aimed at detecting a trend and trading in its direction. They are not suitable for calm and lateral movement. But here it is possible to get a good profit.
Strategy 7. Juicer
This Forex strategy is suitable for the D1 interval. Currency pairs can be any.
Rules. Consider the conditions for opening a buy. We are looking for a combination of a candlestick with a black body (bearish candlestick) on the daily chart, followed by two white candles in a row.
Important!
The close of the second candle should be higher than the high of the previous white candle. If this condition is not met, wait for the next signal.
Place a pending buy order 5 points from the high of the second white candlestick. Stop loss is placed under the low of the same candle. It should be at least 45 points, but not more than 80 points. Take profit is set at 500 points.
If after 4 days the trade is in positive territory, set a breakeven. If the trade is in the red, close it at the market.
When you already have 200 pips of profit, place a trailing stop in 50 pips increments of 200 pips.
Strategy 8. Channels and envelopes
With this Forex trading strategy, we will work on H1 with the EUR / USD currency pair. You will need two indicators: Envelopes and BollingerBands.
Envelopes parameters: Period - 288; Shift - 1; MA - Exp method; Apply to - Close; Deviation - 0.15%.
BollingerBands parameters: Period - 24; Shift - 0; Deviations - 2; Apply to - Close.
Rules. Consider the conditions for opening a buy. We are waiting for the candlestick to cross the blue Envelopes line and close above it.
We open a buy position at the beginning of a new hour. Stop loss is placed on the lower red line. Stop loss size should not be more than 50 points!
When the price passes 40 points into the profit zone, we transfer the deal to breakeven. To get the maximum profit, pull up your breakeven along the lower BollingerBands line.
Strategy 9. Precise entry
This trading strategy is used by professional traders because it gives good signals and profits. Any currency pair for trading can be.
The search for signals will be performed on two timeframes: H1 and M15. Set on the chart PivotWeekly, ParabolicSAR (step - 0.02, maximum - 0.2) and three EMAs with periods of 7, 14, 21. Set the moving averages on M15 to find a more accurate entry.
Rules. Let's consider an example of a purchase. Open the hourly chart and look at the Pivot levels. We are waiting for the price to come to a certain level and bounce off it.
There should be no more than 1-2 candles! When a candlestick or two candles bounced and closed below the level, go to the M15 chart.
We are waiting for the fastest moving average with a period of 7 to cross the other two averages upwards. Now we enter the market.
We set the stop loss at the nearest minimum, but we will not set the take profit. It is better to close deals at the next pivot reversal level. When the price goes into profit, you can move the stop loss to breakeven, and then move it down every hour.
Breakout strategies without indicators
Forex non-indicator trading strategies are the easiest to understand and trade. They take into account the important support and resistance levels that the price seeks and bounces off.
Strategy 10. Sniper
The Forex Sniper strategy is based on working with levels. The working timeframe is M5 or M15. Any currency pair can be traded.
Rules. An order is opened only upon a rebound or breakout of the level. New orders are not opened 20 minutes before the release of important news. You cannot gain more than 40 points in one day. If 40 points have already been accumulated, trading stops.
There are three options for entering:
- We open after a breakout, price fixing at an impulse level or a pullback.
- We open after a false breakout, when a rollback to an impulse level occurs.
- We open when the price exits the trading channel.
We enter with two orders of equal lots. The first order has a take profit of 15 points. For the second order, take profit is set at the nearest total impulse level. Simply put, it is a support or resistance level.
When 15 points are taken, one order is closed. On the second order, you can set a breakeven.
Strategy 11. It couldn't be easier
This Forex trading strategy is for daily charts. Most suitable currency pairs: GBP / USD, USD / CHF, NZD / USD, AUD / USD, USD / JPY, EUR / USD, USD / CAD.
Rules. Consider a purchase example. We are looking for a specific candle on the daily chart: it should form a local maximum, have a long tail on top and a small body of any color.
We draw a horizontal line to the maximum of the candlestick. Next, we expect any subsequent candlestick to break this horizontal line by more than 10 points and close above our line. We place a pending order 5 points higher from the maximum of the formed candlestick that suits us.
Take profit is set at 100 points, and stop loss is set at 50.
If after the opening 3 days have passed, and the price has not reached the target, the transaction is transferred to breakeven.
When the movement is clearly lateral, you cannot look for entry points!
Strategy 12. Ingenious
Forex Strategy "Ingenious" works on GBP / USD.
Rules. Open the daily chart and look at the number of points that the price has passed. If it is 140 points in one direction, then this is already a signal to open a position soon. This unidirectional movement happens about 7 times a month.
Stop loss is set at 60 points from the entry. Exit the market at 100 points or at 11:30 (GMT) the next day. To be sure, set the minimum trailing stop at 50 pips.
Strategies based on patterns and candlestick analysis
Figures and candles are classics of Forex. They are easy to find on the chart and it is easy to determine in which direction the price will move. Having accurately identified the desired pattern, you are most likely to receive your profit.
Strategy 13. Pattern D
This Forex trading strategy is stable and classic, based on the "Double Top" and "Double Bottom" patterns. We work on the H4 timeframe with the EUR / USD currency pair. For help, we will use the SMA, EMA and MACD indicators.
- Parameters for MACD: LowEMA = 13, FastEMA = 5.
- Parameters for SMA: period 89.
- Parameters for EMA: 365, 21, 7.
Rules. Consider purchasing. To generate a signal, you need to find two minima. The second low should be slightly higher than the first. Both tops must be below the level - 0.0045 on the MACD histogram. The stop loss is 10 pips below the second low.
We divide your usual lot that you trade into 3 deals. For the first 30% of the position of the total lot, we fix the take profit above the line of the 21-period EMA.
For the second 50% of the position from the total lot, the take profit is located between the price reaching 89 and the 365-period EMA. The third 20% position of the total lot is closed when there is a strong resistance level nearby.
Strategy 14. Profitable Wedge
This intraday strategy is simple. It can be used on any timeframe and can be traded on any currency pair.
Rules. First, we build important support and resistance lines. Now you can search for the "Wedge" pattern on the chart. But this pattern can indicate both a continuation and a price reversal.
Consider a purchase example. After the Wedge is found, we place a stop loss 20 pips below the lowest side. Take profit is set equal to the double distance between the sides of the Wedge.
Exit the trade when reversal candlestick combinations appear, if the price has not reached the take profit.
Strategy 15. Key reversal
This is another Forex intraday trading strategy that shows amazing results in terms of profit. The work will be carried out on H4, and we take the GBP / USD currency pair. To filter false signals, we will additionally install the Stochastic indicator. The parameters are as follows: 14, 3, 3.
Rules. Rules for opening a buy deal. We are looking for a downtrend. We are interested in a candle that forms a local minimum and has a closing price higher than the closing price of the previous candle. We look at the Stochastic: it should be in the oversold zone, that is, below level 20. The signal line of the indicator is below the main line, or touches it (merges).
We open a buy at the next candle, and set the stop loss below the local minimum. The take profit is set twice as much as the stop loss. When the price has gone into profit at a distance equal to the stop loss, set a breakeven + 10 more points.
If a deal fluctuates around zero for three days or is at a loss, then it should be closed at the market.
5. What trading systems do successful traders use?
Now I would like to say about successful traders and their certain "trading secrets".
№ Trader Strategy 1 George Soros Getting inside information, speculative rumor, intuition. Likes to sell assets, because he definitely feels the beginning of the crisis 2 Ingeborga Mootz Works only with bank stocks. When making decisions, he relies on intuition. The basic rule is to hold shares for more than a year, but not more than two years 3 Richard Dennis Made a fortune in the market with only $ 400 trading futures. Claims that everyone can earn, since anyone can train 4 Larry Williams The king of futures. Made a fortune on the analysis of bars without indicators. Its main principle is to cut losses and the possibility of profit growth. 5 Warren Buffett Founder of the Forex trust management, since he was a long-term investor. The most successful deal that brought him billions was an investment in the insurance business. 6 Paul Tudor Jones He successfully uses pivot points in trading, and considers trading along the trend unprofitable. Surprisingly, his ratio of losing to profitable trades is 75% versus 15%, which did not stop him from making billions. Believes that a trader's success depends on proper risk management 7 George Lane I traded using my created indicator - Stochastic. The most profitable signal throughout his 60 years of trading has been divergence around levels 20 and 80. 8 Stephen Cohen An adherent of short-term trading, who concluded up to 300 trades per day without reading any economic news at all 9 Ed Seykota Fully automated trading. In 15 years, he managed to turn $ 5,000 into 15 million in one account Also, the gurus of stock trading and investing (George Soros, Alexander Gerchik, Alexander Elder, Larry Williams) give beginners the following advice regarding the rules for making transactions and developing a Forex strategy.
Top tips from the pros:
- Any new Forex strategy doesn't have to be complicated. The simpler and clearer it is, the better.
- The abundance of indicators is not directly proportional to the profit. It is better to use no more than 2-3 indicators at the same time.
- A professional will never trade with the last money. He uses only those funds that he can afford to lose.
- Trading without a stop loss is a surefire way to reset your account to zero quickly.
- Apply the “1-2-3” method to your strategy: choose 1 currency pair and test it on 2 timeframes with a maximum of 3 indicators. If for 100 trades you are profitable, then the test is successful.
- Always measure your earnings in points, not money.
- Take a closer look at support and resistance levels. They can bring you very decent earnings.
- Professionals never triple their trading accounts in a month - this is mythical and unrealistic data. Their lossless Forex trading strategies are aimed at slow growth of the deposit, and not at insane unnecessary risks. The maximum that a successful trader expects in a month is 10% with the most risky strategy.
- If you are evaluating the possibility of entering the market for more than 3 seconds with scalping, you are missing out on profits. Lightning-fast assessment of the situation is a guarantee of profitable points on the account.
- If the size of the stop loss is less than or equal to the take profit, such deals cannot be concluded. The size of the potential profit must be at least twice the loss.
6. Real success stories of famous traders in the world
At its core, the Forex market is a ready-made business that is available to everyone absolutely free of charge. The only thing that needs to be invested in it is time.
Now I would like to briefly introduce you to the biographies of people who have earned millions of dollars on Forex and thanks to their persistence in studying the market. Their names are known all over the world, they have a lot of money on their accounts, and their strategies are simple and straightforward.
Some of them, thanks to the exchange game, gained fortunes in the billions of dollars and now, with their success, these speculators inspire thousands of traders around the world.
- Alexander Gerchik. Born in the USSR, graduated from the Food Industry Institute and immigrated to the United States. He worked as a taxi driver. The case brought him to a successful stock trader, whom Alexander Gerchik gave a lift to New York on Wall Street. This day changed his life. Gerchik became a successful trader and is now a managing partner of a large investment company, teaches exchange business to beginners.
- George Soros. Successful trader, investor, financier. Born into a middle-income family, after 1970 he was actively involved in stock trading and became famous for his phenomenal earnings on the British pound. In this deal, Soros earned a billion dollars in 1 day! Later, the financier released his famous book, which he knew "The Alchemy of Finance". There he described his own Forex strategy, which helped him become one of the richest people on the planet.
- Alexander Elder. He graduated from the Medical University and worked as a ship doctor. Then he became an editor in one of the journals on psychiatry. in the 1970s, Dr. Elder became familiar with the opportunity to invest on the stock exchange and since then has turned his professional activity towards trading in the financial market. Now Alexander Elder is a world-famous expert in the field of exchange transactions. His book How to Play and Win on the Stock Exchange has become a worldwide bestseller and has been translated into 12 languages.
If you want to know more about Forex luminaries - watch online broadcasts and recordings of club days in. From my own experience, I was convinced that this is just a treasure trove of the most valuable information.
7. Conclusion
Friends, I think after reading the article, you are convinced once again that following a certain strategy in the Forex market is very important for profitable trading.
How to play the Forex market from scratch - a step-by-step guide to successful trading on the exchange for novice traders
Finding a Forex strategy for beginners is a task that every novice trader solves. And the future earnings on the currency exchange depend on the solution of this problem. Therefore, you should be very responsible when choosing a strategy.
Before choosing a trading strategy for making money, a novice trader needs to know the following: what knowledge is required for confident earnings on the exchange, and only then choose a strategy and test it.
The popularity of Forex trading
The popularity of trading in the foreign exchange market is constantly growing every day. More and more people are deciding as a player.
In order for trading on the financial exchange to be highly effective and bring regular profit, you need to apply working Forex trading strategies for beginners.
Forex trading strategy for a beginner is the order of steps and actions that a trader needs to take during trading in order to achieve a profitable result. Strategies are classified according to the difficulty level. And each trader can choose the right one for himself, which will help him succeed in trading and making money in the currency market.
Basic Forex Strategies for Beginners and Dummies
If you are new to Forex and just starting out as a trader, then your trading strategy should be as simple and straightforward as possible to help you trade profitably in the market. There are four basic Forex strategies for beginners:
- Moving average strategy.
Moving averages provide the trader with data to help determine the direction of the market trend. The Forex market trend is a good source of signals to enter trades. Moving averages are the basic and most common technical indicator. They are used as a trend line that adapts to changes in the prices of the currency market, which distinguishes it from a regular trend line.The trader can receive the following signals from the moving average: if the closing price is above the moving line, this will be a buy signal; if the closing price is below the average curve, it will be a sell signal.
- Moving averages crossover strategy.
This strategy is also among those that help determine the market trend. It combines the use of two moving average lines, one of which is slow (i.e., includes more reporting periods), and the other is fast. The crossover is required here as a basic signal form and is used by traders, since it excludes the influence of the emotional factor on the decision-making process. A typical crossover situation occurs when the price of a currency pair fluctuates from one side of the moving average until it closes on the other side.The crossover strategy provides the trader with the following signals: when the fast moving average crosses the slow one from the bottom, it is a buy signal, and when the fast moving average crosses the slow one from the top, it is a sell signal.
- Forex strategy "Turtle".
The "Turtle" trading strategy is very popular among novice traders or dummies. They are constantly looking online for ways to get the most out of this strategy. In fact, the Turtle strategy evaluates the maximum and minimum values over the past 20 days. It provides a currency trader with the following trading signals: when current prices fluctuate above the maximum value in 20 days, then this is an unambiguous buy signal; when current prices fluctuate below the minimum for the previous 20 days, this is an undeniable sell signal. - Moving averages convergence-divergence strategy.
This strategy helps to capitalize on the relationship between the two moving moving averages. Many traders use the difference between the exponential moving average for 26 and 12 reporting periods. This difference is subsequently plotted on the chart and moves in a range below and above zero.Signals from the convergence-divergence strategy: when the signal line crosses the MACD curve, it is a buy signal, and when the signal line crosses the MACD curve from above, a sell signal appears.
Forex strategies for beginners are those simple algorithms that will help novice traders of the international foreign exchange market conduct their trading activities and make profits using simple charts and signals.
The simpler the algorithms of action, the more accessible Forex strategies will be for beginners.
Making money on the "turtle"
The "turtle" currency trading strategy leads the most profitable Forex strategies for beginners, as it is one of the simplest and most effective among many others. As a teapot in trading, you will quickly become familiar with this method and learn how to make the most of it. The essence of this Forex strategy for beginners is to assess the minimum and maximum chart indicators for the last 20 days. Trades are based on the analysis of price movements for currency pairs. When the value falls below the minimum, you should place a sell bet; if it rises above the maximum, it's time to buy.
Moving Average Strategies
No Forex beginner strategy can be built without an indicator such as a moving average. This term denotes the average price of a currency pair, and on the forex chart, this is depicted as a certain number of candles that fit in a specific period of time. It is also important to note the fact that other very important indicators are also built on the basis of moving averages.
The first beginner Forex strategy can be based on the so-called moving average crossovers. The main task of this strategy is to determine the market trend for efficient opening and closing of trades. To work, you will need to monitor the movement of two moving averages - two lines, one of which is fast, and the other is slow, since it contains a large number of reporting periods. The signal to action is given by crossovers, which play the role of an objective assistant in decision-making and prevent your emotional reaction to fluctuations in currency pairs. The chart of the currency value in this strategy is intended only for determining the stop loss in trading.
Forex trading strategy for beginners using crossovers helps to make a profitable buy if the fast moving average curve intersects with a slow one from the bottom, or a profitable sell when the intersection is from the top.
Forex trading strategy for beginners
If you are just starting your path as a trader and are afraid to build serious Forex strategies for beginners, then the best solution in this situation would be to observe and analyze the actions of experienced traders. Do not rush if you have not mastered such terms as channel strategy or moving average, you cannot determine which currency pairs are the most profitable in a given period of time. Basic knowledge is essential for the first trial and error. And so that these mistakes do not become unprofitable for you, use a demo account with which you can build your first Forex strategies. A beginner should not count on a large profit right away - it is best to start practical trading with a cent account. And only when you have fully mastered the simplest strategies, you can invest more funds and practice in pursuit of more profit - this will be your personal strategy for newcomers to the Forex market!
Now I came through to consider some forex strategies for beginners, with which we will already trade and earn.
Before you start trading, you need to open a demo account, on which we will test our strategies. We figured out how to open the demo in the previous lesson. It is worth saying that you can open an unlimited number of demo accounts, so if you suddenly run out of virtual money in your account, then do not hesitate, select "File" at the top of the terminal, then "Open an account" and open a new demo account.
Before we begin to analyze specific forex strategies for beginners, it is worth giving you some simple recommendations, the observance of which will save your nerves and make your trading more profitable. I hope you really stick to them, and do not forget immediately after reading them (better write them down or print them out).
- Stay out of the jungle. Believe me, in order to earn money, you do not need any complex strategies, with a lot of smart-ass indicators. Use simple trading strategies for beginners. Perhaps later you will "screw up" something there and it will get better, but at the start this is more than enough to make a profit.
- Don't trade small time frames. As practice shows, the more deals you make, the less profit you get. You will trade on time intervals of M15 and below and you will have to sit at the monitor for days on end and at the same time you will earn practically nothing, and possibly also lose. It is recommended to work with H1 time frames and higher.
- Do not change your forex strategies for beginners like gloves. You work for large TFs. There will not be many deals here and therefore it is not worthwhile to conclude that this or that strategy is working after a few days. Work for at least a month or two.
- Don't look at the chart all the time. The price from this does not move in the direction you want. But you will spoil your nerves, besides, you will get tired and lose concentration.
- Never move your stop loss in the direction of increasing your loss.
Description of forex strategy for beginners # 1
This strategy is best suited for trading on the H1 time frame. There will be few transactions on it, in the region of 30-40 transactions per year, so you can open 10 different currency pairs and trade on all of them at the same time. As a result, there will be 300-400 transactions per year. That is, approximately one trade per day.
This strategy uses only one MACD indicator with parameters 5.34.5. For this indicator, we will look at the divergence (I will tell you what it is just below).
In order to add the MACD indicator to the chart of the currency pair you have chosen, click on the "Insert" menu at the top of the terminal, then select "Indicators", then "Oscillators", then "MACD". After you have done all this, you will see a window like the one in the picture below. Set the same parameters as in the picture and click "OK".
Further, within the framework of our Forex strategy for beginners, we will figure out what divergence is. Divergence is a discrepancy between a price chart and an indicator reading. Naturally, it is not very clear in words, so we will analyze it with a specific example.
In the figure below, the price chart clearly shows that point 2 is above point 1. But if you look at the MACD indicator chart, we see that everything is the other way around: point 1a is higher than point 2a. This is an example for an upward movement. Now consider for the top-down.
The price chart shows that point 5 is lower than point 4, and point 4 is lower than point 3. But on the indicator chart, the opposite is true: point 5a is higher than point 4a, and point 4a is higher than point 3a.
This discrepancy is called divergence.
We continue the description of our forex strategy for beginners. The first thing you look for is divergences. As soon as you find it, we move on to the next step, during which we need to build a trend line (we figured out how to build them in the second stage). Now let's figure out at what points to build them.
Our entire price model (hereinafter we will call the model a pattern), according to which we will work, consists of four points and three segments (hereinafter we will call them waves).
Points 1 and 3 are tops (for an upward movement) or bottoms (for a downward movement) along which divergence is observed. Point 0 is placed where the price movement to point 1 began from. Point 2 is placed where the movement to point 3 began.
If you look at the picture below, then I think you can easily figure out which point to put where.
After we have decided where which points are located and in the presence of divergence, we proceed to building a trend line. You need to build it from point 0, through point 2 and further (in the picture above, this is a gray dash-dotted line).
Now, within the framework of the forex strategy for beginners we are considering, it is necessary to wait until the trend line is broken by the valuable one. In the picture above, this happened at point 4. After the breakout, we draw a horizontal line through point 4 and when the price returns to this line, we conclude a deal. In the picture above, we should have bought at point 5.
As soon as you have made a trade, be sure to immediately set a stop loss. It should be set five points below point 3 (if the deal were for sale, then it would be 5 points higher). Also, do not forget about the take profit, which should be twice the stop loss. That is, if our stop loss is 50 points, then the take profit should be 100.
After the price (after opening a deal) passes in the direction we need, the distance equal to the stop loss value, move the deal to breakeven (that is, move the stop loss to the entry point).
On this, perhaps, we will finish with the description of our first Forex strategy for beginners. For a better understanding, I provide another figure, which shows four examples of making deals using this strategy, both for buying and for selling.
To all those who are the most novice trader and are only taking their first steps in forex, I advise you to stop reading the article on this note. Another strategy will be described below, but you do not need to try to use two strategies at the same time. Understand first thoroughly with one, and then with the second, otherwise you will get a mess in your head. Come back to the second strategy later (by the way, add this page to your bookmarks, otherwise you will forget where you found this material at all).
As for the second strategy, it is intended for use on the H4 time frame. There will be even fewer deals on it than on the previous one, but you already know what to do to get more positions. As part of this Forex strategy for beginners, we will use two indicators - an exponential moving average with a period of 200 and an exponential moving average with a period of 50.
In order to add a moving average to the chart, select the "Insert" menu at the top of the terminal, then "Indicators", then "Trend", then "Moving Avarage". After that, you should see a window in which you need to set the same parameters as in the picture below:
Then do the same operation again, only the second time in the "Period" column put the number 50, and of course change the color.
As a matter of fact, the description of this forex strategy for beginners is so simple that I don't even know which side to start from :). In general, we buy when the moving average with a period of 50 (in our picture it is red) crosses the moving average with a period of 200 (green) from bottom to top. Sell when the opposite is true: the 50-period moving average crosses the 200-period moving average from top to bottom.
Set your stop loss 100 points above (for selling) the moving average with a period of 200 or 100 points below (for buying). As the price moves, move the stop loss so that it is always about 100 pips away from the moving average. With regard to profit-taking. Place your take profit three times more than your stop loss.
Perhaps that's all. Within the framework of this article, we examined two trading strategies for beginners, with the correct application of which you can make good money on Forex. The main thing is not to forget that we are still learning, so do not rush to a real account right away, practice at least one or two months on a demo account.
In short, take your time, in the next lessons we will talk more about your career as a trader.
If something is not clear, ask in the comments. I will answer during the day.
If you have just started trading binary options, you will need to choose several effective strategies so that making money on the financial markets does not turn into a casino game. We present to your attention three strategies with different nature and principle of work - "Impulse", "Buratino" and "Spring".
It is much easier for a person who has experience in making money in the financial markets to make a profit than a beginner who got into the world of binary options for the first time. A newcomer in such a situation can use two methods: independent testing and the development of effective techniques and techniques, or the use of effective and proven strategies.
Strategies for newbies in binary options help not only to increase the initial deposit, but also to understand the intricacies of trading fast deals, features and nuances, which in the future will help you better navigate the segment and create your own strategy based on your own strengths and weaknesses.
Impulse strategy
The simplest and most effective ways to make money on binary options, which will be an excellent choice for beginners, is to use events that are planned in advance. Traders actively use this tactic to trade on the Forex market - it is called news trading.
The main task of a trader who has decided to use the "Impulse" strategy is to start making deals as soon as the data significant for the market is announced. A financial or economic calendar is often used to study such events. This allows the trader to save the time for monitoring all events - it is enough to study in advance when information is expected, to enter a few minutes before its announcement to complete a deal.
So, the algorithm of the "Impulse" strategy will be as follows:
Among the numerous strategies, this one is one of the best for beginners, because it does not require training and experience, it can be used with both small and large deposits. However, it also has a drawback - the number of transactions per day may be limited. In this case, it is recommended to supplement this strategy with others.
Strategy "Pinocchio"
The tactical system is easy for novice traders; it does not require any additional large and serious knowledge or the use of auxiliary tools. To use it, you will need to learn several techniques and rules. This is one of the candlestick strategies.
The Buratino trading system was named after the fairytale hero. When Pinocchio told a lie, his nose lengthened, increasing in size. Drawing an analogy with the situation on the market, one can give advice to novice traders - if a candle has too long a "nose", it means that it is lying and soon one should expect a reversal in the other direction.
This is a reversal bar or candlestick pattern that shows a reversal of the thread from the previous one. The simplicity of the strategy is its main advantage, and therefore, it is actively used by both beginners and confident specialists. Can be applied to all assets and timeframes. The rules that are recommended to be followed are as follows:
- the candlestick pattern includes three bars;
- the bar in the center - "Buratino's Nose" always has a body with minimal dimensions, that is, the point of beginning and end of trading operations for a specified time are located approximately at the same level. The smaller the size of the candlestick body, the clearer the buy or sell signal will be;
- also, the bar in the center should have a large tail that goes beyond the boundaries of the neighboring ones;
- the "Nose" candlestick body must be located within the boundaries of the previous bar.
As mentioned above, this strategy can be applied to deals with different expiration dates. To do this, you will need to use the appropriate schedule. For hourly options, you need to look at the hourly chart.
This strategy is easy and effective, but, as in the case of Impulse, it cannot be applied all the time. For trading without limits, consider a strategy based on the use of indicators.
Spring system
The game model called "Spring" was developed by the simultaneous use of three indicators that are available on almost every trading platform:
- CCI (price channel index) with characteristics 200 and -200. The classic borders of the chart of this instrument are 100 and -100. An increase in characteristics is necessary in order to filter out possible incorrect signals in favor of the most accurate ones.
- Bollinger waves, traditional characteristics, set by the system. This indicator is one of the favorite channel tools for many traders. Typically, channel breakouts are used to determine entry points. However, not every breakout can mean an accurate signal for a thread reversal, therefore, the data must be confirmed by indicators of additional instruments.
- Stochastic, characteristics 5,3,3. The operational parameters of the Stochastic will help to identify the beginning of the final and confident reversal of the thread.
To buy an option, the situation on the charts should be as follows: CCI returns from the - 200 zone, Stochastic leaves the oversold zone, the lower boundary of Bollinger Waves has been broken. An example is shown in the graph.
To sell the option, the situation must be reversed. CCI moves out of the 200 zone, Stochastic - from the overbought zone, the upper border of Bollinger Bands is broken.
The user can choose any timeframe, but he must take into account that the longer the expiration time, the more accurate the signals will be.
