Today, there are a huge number of different strategies, tactics and techniques for making a profit and honing your trading skills. But determining the profitable Forex strategies is not so simple. Due to the fluidity of time and all vital processes, traders need to periodically adjust their tactics. It is no secret that with great volatility, the direction of the trend is not particularly important for entering the market, only the intensity of the price movement is important.
The main methods of market analysis
All forecasting methods can be divided into three large subgroups, on the basis of which each trader builds his own profitable Forex market trading strategies:
- Trend or direction-dependent prices.
- The anti-trend ones are characterized by aggressive entry into the market. The master opens positions both at the top of the value and at its bottom, thereby working against the prevailing trend, which entails great risks of losing a deposit, but in case of timely entry - much more profit than with a balanced approach.
- Flat or side strategies that take into account the width of the price channel.
Strategies and tactics - this is the process of combining knowledge, skills in one system, which will give positive results and, most importantly, make a profit. Accordingly, there are about the same types of strategies as there are traders.
Pending Order Strategy
A strategy using pending orders (an order to the trading system to carry out one or another action) is as follows. The work uses various time frames, starting with a five-minute interval, and tools for trading.
The following indicators are used in this strategy:
- Fractals.
- The moving average with a period of 21 is a simple method applied to closed prices and in blue.
- A moving average with a period of 120 is a simple method applied to closed prices with a red style.
As soon as the intersection of the moving average lines occurred, and a fractal appeared at the local extremum, you can place a pending order depending on the direction of the intersection. The cross from top to bottom is a buy signal, and from bottom to top - to sell. To reduce losses, immediately after opening a position, you need to set a stop loss. This is a team ordering the broker to close the deal after reaching the specified mark. Stop loss is set depending on the opening of the transaction. It can be either behind a moving red or behind a fractal.
Pipsing
Strategy using Heiken Ashi MA or so-called pipsing. By this concept is meant a series of periodically opened positions with a minimum profit of approximately 2–5 points, which is obtained when trading on short time periods using a trend. This is the most profitable simple Forex strategy that is most often used by novice traders. The essence of this system is that you can close positions with frequent profits, subject to the correct entry into the market. In each individual transaction, the income may be small, but as a result of the results of trading activities, an impressive amount can come out, with minimal risk.
This strategy works on fifteen minute and thirty minute time intervals. She uses the following indicators:
- HeikenAshiMA, which, depending on the direction of the trend, can change the color of bars on the price chart.
- Moving Average (EMA) with a period of 5, with an exponential method, applicable to close and painted in white.
- Moving Average (EMA) with a period of 12, with an exponential method, applicable to open and painted in red.
- PriceChannelStop, which, depending on the direction of the trend, can change its color.
- Moving Average (LWMA) with a period of 55, with a linearly weighted method and painted in yellow.
Example: opening a position on buy (or purchase). For this, it is necessary that the color of the bars turns blue with HeikenAshiMA. Further, the intersection of two moving averages with periods of 5 and 12 is mandatory. In this case, the white indicator should be higher than red, and the price bar is fixed on the price chart and is located above the crosshairs of movings. In this case, PriceChannelStop should be located below the blue bars and be green. Transactions on sell (or sale) are opened in the same pattern, just the opposite.
The LWMA slowdown indicator in this strategy is a trend determiner that dominates the chart in the necessary time period for trading. Stop-loss is set 20 points below the moving red color, sometimes taken with a margin of 2-3 points. Take profit is also set at 20 minimum price deviations, possibly a little higher, it all depends on the chosen tactics of the trader.
Trading Strategy Traffic Light
If we talk about whether the most profitable Forex trading strategies exist, then this strategy fully meets this requirement. It is not complicated by a huge number of different indicators, it is used, as a rule, only in the hourly period, and with its help it is possible to carry out trading both intraday and in the medium term.
In its framework, indicators are used:
- Moving average (MA) with a period of 120, a simple method applicable to closed prices (close) and with a red style.
- Moving average (MA) with a period of 55, a simple method applicable to closed prices (close) and with a yellow style.
- Moving average (MA) with a period of 5, an exponential method applicable to closed prices (close) and with a green style.
- Moving average (MA) with a period of 24, an exponential method applicable to high (low) and low prices (blue).
- Oscillator MACD with periods of 18, 24 and 52.
For example, to open a buy position, it is necessary that the moving averages are arranged according to the sequence of colors at the traffic lights (either red, yellow, green; or green, yellow, red). And the blue histogram of the MACD oscillator should be above the red moving average, which is the signal line. To open a sell position, the opposite is true.
This strategy only works in a trend. In a flat, all moving ones are in a crosshair, and such signals are not taken into account, are ignored. Accordingly, trade is not carried out. Stops are set at the rate of 5% of the size of the deposit, and the profit can be doubled.
Scalping
This term is derived from the verb "scalp", meaning the removal of the scalp from the scalp. On the foreign exchange market, local and daily extremes act as a “head” from which profit is formed.
If we take into account all the profitable Forex strategies, then this is the most difficult in terms of technical and emotional state of the trader. When using this system, it is necessary to have the ability to make quick decisions in stressful situations, follow the psychology of the market and have tight self-control. Important here is the principle of work: entry, quick profit, timely exit.
The best profitable Forex scalping strategies have enormous potential for projected profits. As a rule, stops are not set here due to the fact that losing trades are detected and closed almost immediately after their opening.
Often, trading is carried out intraday using breakdowns of the daily maximum and minimum. There is also the concept of breakdown of a trading session. Scalping tactics do not provide for the use of technical indicators, however, they can be set to determine the direction of movement or to more fully perceive the price chart. Currency charts are built on preferably short time periods (M5, M15, M30).
Considering many Forex strategies - profitable, daily - among them you can highlight pips and scalping, as the most effective and risk-free trading methods.
Strategy “Calm Positional”
This is one of the simplest trending strategies based on two indicators:
- Simple Moving Average (SMA) with a period of 21, applicable to closed prices.
- A stochastic oscillator with fast - K 5%, slow - D 3% periods and with a slowdown - 3.
The daily time period is used. A signal to open a buy position is the location of the price chart above the moving average, and vice versa for sales transactions. In this case, the oscillator should give a filter signal, that is, the lines should intersect either from top to bottom, which is a signal to buy, or from bottom to top - to sell.
To open an operation, you must have the following criteria:
- A setup or two bars or candles close to the moving average that should be located on one side of the midline. But candles can be located on the opposite side of each other. For example, the body is on one side of the midline, and its minimum or maximum is where the second setup candle is located.
- A trigger, that is, closing the current day below the minimum price of the previous one for short positions, and for long ones - above the maximum mark.
- The resolution signal that the stochastic oscillator gives.
Simple active strategy
Based on graphic patterns that are used in combination with horizontal levels. It differs in that technical indicators are not used here.
Strategy "Ruler"
It is carried out once a day on a daily time period. Moving averages with parameters of 10 and 200, as well as plotting horizontal lines on the graph can be used. A signal to open positions will be repulsion from these lines. A rebound from the support level is a buy signal, from a resistance - a sell signal.
Strategy "The 7"
Very profitable Forex strategies can rightfully be presented by this channel trading tactics. Its possible profit may exceed the loss by 3, or even 5 times. This system works using moving averages (EMA) with a period of 5 with the closure of low (Low) and high (High) prices. As a result, a price channel is formed through which the filter of open positions occurs. For short positions, it is necessary that the black candlestick be closed inside the price channel, while its opening should be outside it. For long positions, the white candle should also be closed inside the channel, and its opening should be below its border. If the opposite signal occurs, it is necessary to close all positions and exit the market.
Most profitable strategy
All the above tactics and trading methods are interpreted as the most profitable Forex strategies, but it all depends on the preferences of the trader. To do this, you need to determine the exact time of the trade, a more active and less aggressive session, as well as understand which indicators are more intelligible and effective. If these and many other conditions are met, then the most profitable Forex strategy has been developed, which is individual for each individual master or novice speculator.
When choosing and shaping a trading strategy, an intuitive approach should be used, while working with its use, there should be comfort and a certain confidence in making a profit.
Perfect strategy
In the Forex market, a super-profitable strategy can be created by each trader, for whom it will be quite profitable and reliable. There is some truth that the ideal strategy is one that is created taking into account the individual characteristics of the master’s trading development, his knowledge, skills and the stability of his nervous system.
All profitable Forex strategies must be tested by a trader to determine the most suitable and most secure in terms of deposit.