Heroes of Ukraine

«Market Leader» - news and previews making you rich.

Thursday, 19 January 08:51 (GMT -05:00)



Foreign exchange market

Forex Trading Strategies – Recipes for Successful Trading


We are going to dedicate this article to FX trading strategies, which is specific trading algorithms allowing you to trade for profits.
 

 

 

 

This article will let you learn the following:
- what are FX trading strategies
- why you need trading strategies
- various types of trading strategies
- capital management rules
- how to choose a trading strategy
 
What is a trading strategy?
 
Any professional activity requires a certain plan. Professional traders need trading strategies to avoid reckless trading through:
- determining the entry and exit rules
- determining the money management rules
This leads us to believe that a trading strategy is a set of trading and money management rules, which are required to be followed at all times to show consistent results.
 
Why do you need a trading strategy?
 
Can you trade Forex without a trading strategy? Yes, you can, but this is going to lead to losses. It’s impossible to trade financial markets successfully without a profitable strategy! Indeed, trading is a rather complicated type of human activity, whatever those commercials say. Even if you get exclusive trading software with excellent features and intuitive user interface, this doesn’t necessarily mean that you are going to be a winning trader making money effortlessly. Trading Forex or any other financial market is a serious activity, which means it requires a serious approach. That’s why you cannot afford to gamble here, if you want to trade Forex for a living. You bet your money to win more money. Reckless trading is a sure way to losses. That’s why your trading needs to be planned and guided in a certain way. The best way is to get yourself a nice trading strategy and get yourself up and running with it.
 
Types of trading strategies
 
There are several types of trading strategies for FX.  For starters, they can be of 2 major types: those based on technical analysis and those based on fundamental analysis.
 

 

Strategies based on technical analysis imply using technical and charting tools to make predictions used to enter and exit a trade. For example, if we are talking about the “Victory” trading strategy, the best time to enter a trade is the situation when the price rebounds from the top of the sloping channel:

8bb1f4e70bb9.jpg

There is another strategy. It’s called “20 points a day”. The trader gets a buy signal if the price breaks above the Moving Average and the signal ling of the Momentum indicator also breaks above the indicator’s central line:

0b5dd4d063a9.jpg

Strategies based on fundamental analysis imply analyzing daily macroeconomic reports to make trading decisions based on the data. Those reports are scheduled and released throughout the trading week, including unemployment rate, consumer confidence, interest rates, GDP etc. based on the data, traders make their trading decisions. For example, if the GDP report indicates a slowdown, the country’s national currency is very likely to get weaker against other currencies since this means a weaker economy. Or if the central bank raises the interest rates, this makes the national currency stronger.
 

 

For example, when the Federal reserve (USA) raised the interest rate by 0,25% during the latest meeting, this is made the U.S. Dollars stronger against other international currencies:

5026622635c7.jpg

EURUSD instantly dropped down, which means that the Euro got weaker against the U.S. Dollar as the U.S. Dollar got stronger against the Euro. 

f2e7e624d2c3.jpg

In this case, the task is to analyze the calendar, find major news, wait for the news, and trade accordingly.
 
Also, trading strategies can be divided depending on the trading approach:
Trading with the trend
Trading against the trend
Martingale strategies (double your bet each time you lose)
Strategies based on pending orders
Math strategies
Scalping strategies
Intraday, mid-term and long term strategies and so much more.
 
Money management
 
This is an inseparable part of any decent trading strategy. It makes up for 50% of success.
Money management is all about managing your capital wisely to avoid major risks and losses and being able to withstand drawdowns, which are inevitable since no trader can win 100% of the time.  

 

 

85032c11fa97.jpg

Conservative traders never invest more than 1-2% of the entire capital in a signal trade. They think about saving their money first and multiplying it second.
Aggressive trader risk over 5% per trade on a regular basis. Some of them may even go all in, as poker players say. This is too risky and usually brings nothing good over the long term. So, avoid aggressive trading styles.
 
Why to choose a trading strategy for a beginner?
 

 

Practice shows that the best choice for most beginners is a strategy based on technical indicators with 100% clear algorithm and no ambiguous signals. For example, some indicator triggers a signal and the trader buys or sells the chosen asset depending on the direction of the signal.

28149ebde93f.jpg

You can also invest of PAMM accounts to get passive income. For the purpose, it’s necessary to choose them wisely. We recommend using pro-rebate.com for investment purposes. Good trading and investing!

 

You are free to discuss this article here:   forum for traders and investors

 

Add to blog
Got a question? – Ask it here »
 

Trading Signals by Dukascopy 17.01.2017

These are the Main Daily Trading Signals with a closer look at the technical models and how they compare with the interbank at 8 AM GMT.
Euro/Dollar sees 4 buy prompts on both its 1 and 4-hour charts, but the 24-hour scale turns neutral with 5 models, and it is in line with the less than 1% long interbank.

Publication date: 17 January 09:46 AM

Orbex: Executing Orders In Client's Favor

For any FX trader out there, it’s really important, even vital, to choose the right broker to trade with. Even if you are a pro trader and really know how to make tons of money trading currencies, or pretty much any other financial assets available, nothing will actually help you to make money if you have signed up with a disreputable broker or even a scam. I hope the reasons are obvious.

Publication date: 17 January 08:44 AM

Masterforex-V Club’s «PrivateFX №1» Portfolio: New Year - New Profits

They say, the way you spend New Year’s Eve is the same way you’ll spend the rest of the year. This is something Masterforex-V experts would like to believe now. Those who invested in the PrivateFX №1 portfolio, could see their managers make profits over the first 2 weeks of 2017.
 

 

Even despite the fact that there were a lot of days-off over the reporting period, the portfolio, which initial started at $15K in early 2016, got $267,1 or +1,78% of profit this time. This is a good start of the year, isn’t it?
Publication date: 17 January 06:41 AM

Trading Signals by Dukascopy 16.01.2017

You're watching the Main Daily Trading Signals for Monday. Here's how the interbank compares with the technicals at 8 AM GMT.
All three time ranges bring different results for the Euro/Dollar, which is mostly bearish in the short-term. The mid-term turns neutral with 4 models, and the daily outlook brings 4 buy prompts. Neutral at less than 1% long, the interbank supports the 4-hour models.

Publication date: 16 January 07:10 AM

Vipro Markets: Successful Trader Means Free Trader

Any trader, whether this is a beginner or a professional with many years of expertise, needs a reliable broker to trade financial markets. Such a company is required to be able to provide access to international financial markets and to back optimal trading decisions as the broker’s efficient trading technologies guarantee safety of client funds.

Publication date: 14 January 09:25 AM

TOP5 Masterforex-V Traders Made 4541 Profits of Profit in December 2016

In one of the previous articles we already reported that Masterforex-V Academy’s 60 best traders have set a new profitability record by generating really amazing profits – over 70 000 points in The first half of December alone. December has been a profitable month as well. As of December, they have made over 54000 points of profit.

Publication date: 11 January 10:54 AM

Strengthening Dollar May Challenge Global Economy

The U.S. Dollar is currently strengthening, which may become a problem for the entire global economy.  The rally seems to be confident. The tendency started after Donald Trump won the U.S. presidential election 2016. On top of that, the American currency is now 40% stronger than 5 years ago.

 

 
Publication date: 02 January 08:17 AM

Active Investor by PrivateFX – World’s Best Investment Product 2016

Forex investments are some of the best way to invest your money for a considerable passive income, especially if compared with investments in residential property, startups, stocks, bank deposits etc.

Publication date: 30 December 07:00 PM

MetaTrader vs MetaTrader: Who will win the fight between МТ5 and МТ4?

Statistics show that that MetaTrader 4 is the most popular trading software in the world when it comes to Forex trading. MT4 is a masterpiece by MetaQuotes. However, the company has been actively promoting a newer version of the trading software, which is MetaTrader 5. The company’s experts say that the process of switching to the new software is very slow.
 
Publication date: 30 December 05:31 PM

Orbex: Gold is still one of the best assets for FX traders

If you ask investors which is the most reliable asset to invest in today, they will probably answer that this is gold. Indeed, gold prices has their ups and downs from time to time. However, if to compare gold to other conventional assets, the upward potential is more vivid and considerable.

 

 
Publication date: 30 December 04:08 PM