Forex trading strategies
Before writing this article we had analysed a lot of related articles describing different fx trading strategies. We have chosen the most popular, effective and simple in using, in our opinion, strategies.
Strategy 1 Three candles
This forex trading strategy is well-suited for scalping. Trading timeframe – М1. Any currency pair maybe used in this strategy.
Rules. At first it is necessary to wait for a formation of two candles, moving in the same direction. It would be better if they do not have long legged shadows. After the appearance of the third one we may unclose. We also need to use Stochastic oscillator (Stochastics) as an additional input signal.
For example, if three candles go up, and indicator points at a down trend, a transaction is not made. Purchasing signal will appear at the time when Stochastic is situated in the oversell zone.
Strategy 2 Simple
People who love risks will like this scalping strategy from the minute. To start working with this strategy it is necessary to take a pair GBP/JPY and to set indicator BollingerBands on the price diagram with the following parameters:
- period 50, excursion 2 (red line).
- period 50, excursion 3 (orange line).
- period 50, excursion 4 (yellow line).
Rules. Optimal trading time is between London session opening and Japanese session closing. Moreover, it is prohibited to carry on trade on flat market and during news publication.
Let’s consider a purchase. We should unclose at the moment when the price is between orange and red low lines. Stop-loss is adjusted depending on your personal loss percentage in one transaction. It is usually not more than 3%.
A sale is effected in the same way, if there is a mirror situation.
Strategy 3 Juicer
This strategy is suitable for D1 interval. Any currency pair may be used.
Rules. Let’s consider purchase opening conditions. We need to find a candle combination with black body (bear candle) followed by two white candles on the day diagram.
Closing of the second candle must be higher than the maximum of the preceding white candle. If this condition was not observed, we need to wait for next signal.
We adjust pending purchase order at a distance of 5 points from the second white candle maximum. We adjust stop-loss under the minimum of that candle. It should be not less than 45 points, but no more than 80 points. Take-profit size we make equal 500 points.
If after 4 days a transaction has a positive value, we will adjust breakheaven. If a transaction has a negative value, we close it in market.
When you already have 200 points of profit, adjust trailing-stop in increments of 50 points and of 200 points size.
Strategy 4 Genious
Forex strategy “Genious” functions with GBP/USD.
Rules. We open a day diagram and search for a number of points which a cost got through. If it is 140 points in the same direction, this is a signal to a soon position opening. Such a unit-direction motion happens around 7 times in a month.
After that, next trading day we wait for the cost to get through not less than 70 points in the same direction. Now it is time to enter.
We adjust stop-loss at a distance of 60 points from the entrance. Next day on 100 points or at 11:30 (GMT) we leave the market. To be safe, adjust a minimum trailing-stop on 50 points
Strategy 5 Profitable wedge
This day strategy is very simple. It may be used in any time-frames and with its help you may trade with any currency pair.
Rules. At first we build important support and resistance lines. Then we may search for a “wedge” figure in the graph. But this pattern can also indicate both continuation and price reversal.
Let’s consider a purchase example. After we found the wedge, we adjust stop-loss on 20 points lower than the lowermost side. Take-profit we adjust equal double distance between the wedge sides.
We abandon transaction after appearance of reversal combinations of candles, if a price did not reach take-profit.