7 Winning Strategies For Trading Forex Free Pdf

Identifying a successful Forex trading strategy
is one of the most important aspects of currency trading. In general, there are numerous trading strategies designed by dissimilar types of traders to help you make profit in the marketplace.

However, an individual trader needs to notice the all-time Forex trading strategy that suits their trading mode, as well every bit their adventure tolerance. In the end, no i size fits all.

In lodge to make profit, traders should focus on eliminating the losing trades and achieving more winning ones. Whatsoever trading strategy that leads you towards this goal could bear witness to be the winning one.

How to Choose The Best Forex Trading Strategy

Before we go on to discussing the well-nigh popular Forex trading strategies, it’s  of import that nosotros understand the best methods of choosing a trading strategy. There are iii main elements that should be taken into consideration in this process.

Fourth dimension frame

Choosing a time frame that suits your trading style is very important. For a trader, there’s a huge difference betwixt trading on a xv-min chart and a weekly chart. If y’all are leaning more towards becoming a scalper, a trader that aims to benefit from smaller market moves, then y’all should focus on the lower time frames e.g. from i-min to 15-min charts.

On the other hand, swing traders are likely to use a iv-hour chart, besides as a daily nautical chart, to generate profitable trading opportunities. Hence, before y’all cull your preferred trading strategy, make sure you answer the question: how long do I want to stay in a merchandise?

Varying time periods (long, medium, and brusk-term) correspond to different trading strategies.

Number of trading opportunities

When choosing your strategy, y’all should answer the question: how frequently do I desire to open positions? If you are looking to open a higher number of positions then yous should focus on a scalping trading strategy.

On the other hand, traders that tend to spend more than time and resources on analyzing macroeconomic reports and fundamental factors are likely to spend less time in front of charts. Therefore, their preferred trading strategy is based on college time frames and bigger positions.

Position size

Finding the proper trade size is of the utmost importance.
Successful trading strategies
require you to know your take chances sentiment. Risking more than you tin is very problematic every bit it can lead to bigger losses.

A popular advice in this regard is to set a adventure limit at each merchandise. For instance, traders tend to set a one% limit on their trades, significant they won’t risk more than ane% of their account on a single merchandise.

For case, if your account is worth $xxx,000, yous should risk upward to $300 on a single trade if the chance limit is set at 1%. Depending on your gamble sentiment, you tin can move this limit to 0.5% or 2%.

In general, the lower the number of trades you are looking to open the bigger the position size should be, and vice versa.

3 Successful Strategies

By at present, you lot take identified a time frame, the desired position size on a unmarried merchandise, and the approximate number of trades you are looking to open up over a certain period of fourth dimension. Below, we share iii popular Forex trading strategies that have proven to be successful.

Scalping

Forex scalping
is a popular trading strategy that is focused on smaller market movements. This strategy involves opening a large number of trades in a bid to bring small profits per each.

As a result, scalpers piece of work to generate larger profits by generating a big number of smaller gains. This approach is completely opposite of holding a position for hours, days, or even weeks.

Scalping is very popular in Forex due to its liquidity and volatility. Investors are looking for markets where the price action is moving constantly to capitalize on fluctuations in small increments.

This type of trader tends to focus on profits that are around v pips per merchandise. Withal, they are hoping that a large number of trades is successful as profits are constant, stable and easy to achieve.

A clear downside to scalping is that y’all cannot afford to stay in the merchandise too long. Additionally, scalping requires a lot of time and attention, equally you have to constantly analyze charts to discover new trading opportunities.

Let’southward at present demonstrate how scalping works in practice. Beneath y’all see the EUR/USD 15-min chart. Our scalping trading strategy is based on the idea that we are looking to sell whatsoever attempt of the cost activity to move above the 200-period moving boilerplate (MA).

In nigh iii hours, we generated 4 trading opportunities. Each time, the toll activeness moved slightly above the 200-period moving average before rotating lower. A stop loss is located 5 pips in a higher place the moving average, while the price action never exceeded the MA by more than 3.five pips.

Accept profit is also 5 pips as we focus on achieving a big number of successful trades with smaller profits. Therefore, in full 20 pips were collected with a scalping trading strategy.

Day Trading

Mean solar day trading
refers to the process of trading currencies in 1 trading day. Although applicable in all markets, day trading strategy is mostly used in Forex. This trading approach advises you to open and close all trades within a single day.

No position should stay open overnight to minimize the risk. Unlike scalpers, who are looking to stay in markets for a few minutes, day traders usually stay active over the mean solar day monitoring and managing opened trades. Day traders are more often than not using 30-min and 1-60 minutes fourth dimension frames to generate trading ideas.

Many day traders tend to base their trading strategies on news. Scheduled events e.k. economic statistics, involvement rates, GDPs, elections etc., tend to have a strong touch on the market.

In addition to the limit set on each position, twenty-four hour period traders tend to set a daily adventure limit. A mutual conclusion amidst traders is setting a 3% daily risk limit. This will protect your account and uppercase.

In the chart above, we see GBP/USD moving on an hourly nautical chart. This trading strategy is based on finding the horizontal support and resistance lines on a chart. In this item case, we are focused on resistance equally the toll is moving upwardly.

The price motion tags the horizontal resistance and immediately rotates lower. Our stop loss is located higher up the previous swing high to allow for a minor breach of the resistance line. Thus, a stop loss order is placed 25 pips in a higher place the entry point.

On the downside, nosotros use the horizontal support to place a turn a profit-taking order. Ultimately, the price action rotates lower to bring us effectually 65 pips in profits.

Position Trading

Position trading
is a long-term strategy. Dissimilar scalping and twenty-four hour period trading, this trading strategy is primarily focused on key factors.

Minor market fluctuations are non considered in this strategy as they don’t affect the broader market place picture.

Position traders are probable to monitor central depository financial institution monetary policies, political developments and other cardinal factors to identify cyclical trends. Successful position traders may open simply a few trades over the entire year. All the same, profit targets in these trades are likely to exist at least a couple of hundreds pips per each trade.

This trading strategy is reserved for more patient traders as their position may have weeks, months or even years to play out. You can discover the
dollar index (DXY)
reversing its trend direction on a weekly chart beneath.

A reversal is a result of the huge monetary stimulus provided by the U.s. Federal Reserve and the Trump administration to assist the troubled economic system. As a result, the amount of active dollars increases, which decreases the value of the dollar. Position traders are likely to start selling the dollar on trillion-dollar stimulus packages.

Their target may depend on dissimilar factors: long-term technical indicators and the macroeconomic surroundings. One time they believe that the current surly trend is nearing its finish from a technical perspective, they volition seek to exit the trade. In this example, we see the DXY rotating at the multi-year highs to trade more than than 600 pips lower 4 months later (March – July).

Summary

• Each trader needs to find the best Forex trading strategy that suits their trading way;

• Choose your own trading strategy past finding a preferred fourth dimension frame, the desired position size and the number of trades yous are looking to open;

• Scalping is a popular trading strategy that involves opening numerous trades over a short period of time to capitalize on smaller market movements;

• Mean solar day traders tend to open and close all trades within a single day;

• Position trading is reserved for more patient traders with a background in finance and economics as they look to profit from long-term market trends.

Any opinions, news, research, analyses, prices or other information contained on this website is provided every bit general market place commentary and does not establish investment advice. ThinkMarkets will not take liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.