Forex Trading Strategies That Work – Let’s talk about trading strategies and in this article I share 5 trading strategies that I use or use in my trading. Individual strategies can be traded and some of them can be combined.
Each trading strategy combines a number of interactive elements to deliver powerful signals. Of course, other triggers and strategies can be added to this process. If you like this method and you would like to learn my current trading strategies and get my trading structure, be sure to check out our Masterclass where we have our current trading strategy.
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I use a 14-period RSI indicator as a standard indicator. When the RSI is above the 50 level (orange line), you are only looking for bullish signals. And when the price goes down below the 50 level, you just look for bearish crosses.
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1. The short-term commuting average is greater than the long-term commuting average. This is a bullish signal because it means short-term prices are rising relative to long-term prices. This indicates the energy level.
2. The RSI is trading above the 50 level which means it is safe to follow the horizontal signal. The RSI, therefore, is an indexing tool. If the moving average crosses with a strong signal but the RSI is below the 50 level, a trader will not open any long trade.
3. A moving average in the bearish direction happened here. Although the average is close to the first crossing, we have to wait for a stable crossing.
Of course, you can combine multiple strategies with these two. For example, a trader can add trend lines or intervals to the plan. Or adding a long sequence of moves as an extra filter for the controls.
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In case (1), the moving average crossed the top. The price was above the previous moving averages but you should wait for a moving average. When the average is crossed, the RSI is above the 50 level, confirming the high signal.
By now you may have been able to follow the process and understand how to create a custom layout in steps 3 and 4.
I do not recommend to start trading with this particular system. Instead, try on an investment and get a feel for how the parts work together. You may want to do other things or add different tools to this process.
Also, be sure to check out my latest article on stops, targets and winrates when it comes to choosing the right ones for your trading strategy.
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I used to trade a lot of information. For this, I set the Bollinger Bands(r) at 2.5 standard deviations to create a broad channel. With a highway, the increase in road prices is even more important and a very important factor. You can also set it to 3 settings to filter out most of the price action and get bigger peaks.
The top alone is not enough and I recommend adding a filter candle on top. A peak that comes with a wrap around candles or a pin usually gives stronger trading signals.
In the example below, the price made a high through the top and quickly pulled back into the channel. The fact that the weather is closed in the corridor is another key point. During strong trends, the price sometimes closes out or is very close to out. You should avoid those situations and wait for a complete rejection.
In this example, the peak happened as a pinbar and thus it was given at least 2 reception signals: a top line + a confirmation of the candle.
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The hardest part when it comes to using mass media is converting the traffic that just one miss. Suppose you see a large peak but nothing else together. In such scenarios, you should skip the trade even though it looks tempting. But if you have built a system that requires contact signals such as a candlestick pattern and maybe even a signal at a previous support/resistance area, you should follow the rules and skip the trade. This is why most traders can’t sit still, but it is very important that you only trade when you have all the signals of the trade.
Therefore, write down your trading rules and put them where you can always see them in your trading. It’s a constant reminder of what you’re looking for.
Divergences are one of my favorite things and I have used divergences in many of my trading strategies for years. I have discussed the length of the concept of difference in other articles.
In the explanation below, the price made a double breakout in phase 1. The price made 4 consecutive highs (2), while the RSI made 4 consecutive lows.
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As of this writing, the price has made several lows (3) and the RSI is trending higher (4). This indicates that the power is decreasing.
Of course, this is not enough to enter a trade because the price can move for a long time even if it shows a difference. As with all marketing strategies, it is necessary to add other links to a strategy of diversity.
The screenshot below shows the same view from above, but this time I have added a 40-period moving average and trend line; We will discuss common lines such as plan 5 in this article.
The duration of the moving average is very important here and you can see that the price violated the moving average several times during the upward movement to the left. Therefore, a long-term trend would be a better option for such a bearish market.
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The current line in part (2) is not broken and therefore, no signal is given. As mentioned above, a difference alone is not a strong indicator and the serial communication method works well in this case. display. At this point, a trader will simply wait for a strong trend line before looking for buying opportunities.
Uptrends are one of my favorite trading concepts and especially for new and struggling traders, spotting trends is very common. it’s easier because it’s more objective.
In the window below, the maximum resistance in position (1) is about 5 points of connection. This condition has a high chance of breaking. It is better, before the split, the price “stopped high,” which means that the sellers could not reduce the price and sell to the market and more. In my trading, I call this the “bounce bottom” concept and it usually indicates a high probability.
As soon as the price breaks from the side line, the trader will look for short orders that will allow the standard levels to be set. Points (2) and (3) are good examples here. Such correlation fields are often used in time series data tracking and I have covered this in the past in my guide .
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To improve the power of trading signals, one can add a moving average to the chart as shown in the screenshot below.
The average acts as a filter for the direction of the trend and you will only look for trades in the direction of the average.
In phase (1), the price falls above the moving average and the trader will start looking for special opportunities. The following situations occurred in parts (2) and (3) when the price was set in the direction where the resistance level can be pulled up. The price paused for a while in those moves and the breakout showed continuation.
In part (4), the price broke below the moving average and also broke from the side that is trading the top of the uptrend. Usually, such upper patterns show signs of divergence and an RSI indicator can be added as a third level of communication.
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In part (5), the trend correlation with a horizontal support level is broken and since the price is below the moving average, the trader will look for upside opportunities.
In part (6), the market has formed a basic pattern with a horizontal level and the breakout occurred with the moving average.
With the help of normal lines, it can be clearly defined together. When you can connect 3 or more highs and find a trend line down to the top, a bullish breakout usually indicates a continuation of the trend.
All three symbols in the window below show the periods where the combination is defined in the direction by the fourth line. go down. And every time, the breakout shows the continuation.
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In the window below, I have added a 40-period moving average to the chart. For all 3 games, the average confirms the direction of the trend. Not only is the price below the moving average for each indicator, but the moving average itself is pointed down, confirming the direction of the trend, when the trend line is broken.
Again, I don’t recommend you blindly copy those trading strategies, but use them as inspiration. Try different ideas, see which ideas come naturally to you, and then explore.
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