Countless Forex trading strategies have been invented over the
years, some relying on technical use of charts and numbers and others
relying on a fundamental understanding of the market with reference to
current events.
Some have become very popular while others are only used
by a minority of traders.These trading strategies range in different
levels of complexity. We will now discuss some of our expert’s favorite
strategies starting with a rather simple one and moving up the
complexity scale as we go along.
2.Support and Resistance Levels Forex Trading Strategy
Every forex trader, advanced or novice, should learn how to look for
support and resistance levels on the charts. It doesn't matter if you
trade Forex, commodities, stocks or any other instruments, this strategy
will serve you as a baseline for your trading activity and analysis.
The best thing about support and resistance levels is that a good trader
can spot them even on a "naked" chart since they are easy to identify.
3.Fibonacci Indicator Forex Trading Strategy
One of the most famous and popular forex trading strategies is
Fibonacci, named after the famous Italian mathematician. Considered as a
medium-long term trading strategy, we use it to follow repeating
support and resistance levels. History shows that the market moves in
waves and Fibonacci takes advantage of this fact. Fibonacci ratios can
help us identify potential resistance and support levels on the
financial charts. The most common ratios are 61.8%, 50% and 31.8%.
4. Multiple Time Frames Forex Trading Strategy
We at FX Market Leaders love
to use this method to double-check the trading decisions that our
analysts take. The way to use this trading strategy is to follow a
certain currency pair over different time frames. By analyzing different
time frames
we can spot trends on bigger and smaller scales and make a better
analysis of the overall trend. While there is no limit on how many time
frames to follow, we recommend to look at not more than 3-4 time frames simultaneously. A good combination can be 15 minutes chart + 30 minutes chart + 5 hours chart.
5. Scalping - Short Term Forex Trading Strategy
Many novice forex traders find scalping to be a great technique.
Scalping is a very low-risk strategy but nevertheless allows a strong
trader to make enormous profits. This trading strategy requires a great
amount of patience and awareness and although it is low
risk it is still very hard for novice traders to profit from it.
Emotions must be set aside as they lead to compulsive actions which do
not work with scalping at all.
6. Horizontal Levels Forex Trading Strategy
Understanding horizontal levels is considered by many as one of the
first things that a novice trader should learn. Horizontal levels help
us analyze the charts and are mostly used in combination with other
Forex trading strategies, but can also be used on their own as a
standalone method for trading.
This unique indicator works a bit differently from the rest of the FX
indicators that traders usually use, because it indicates the strength
of a market trend,
and not its direction. We believe that it is a great tool for traders
who are a bit more advanced and wish to get an extra help for their
trading decisions from an additional indicator. The reason for its
popularity is that we know that by placing a trading position at the
same direction of a strong, solid trend, we increase our potential for
earnings while at the same time we reduce the level of risk that we
take.
8. Carry Trade Forex Trading Strategy
If you are an advanced trader who is looking for an alternative way
to profit from your trade on the long run, then Carry Trade might be a
good technique for you. In our article about carry trade we explain thoroughly how to use carry trade so you will be able to understand the concept behind this strategy.
9. Candlestick Forex Trading Strategy
Candlestick charts are the most common chart types used by retail
traders and investors. There are other types of charts such as line
charts, bar charts etc., but they don't tell the story of past price
action like candlesticks do
and when trading is based on technical analysis, the decisions for
future price action are made based on how the price has reacted in the
past. I find candlesticks to be very useful and they are one of my
favorite indicators. They work almost perfectly in volatile times, but
even in less volatile times they work pretty well if used in combination
with one or two other indicators.
10. Head and Shoulders Forex Trading Strategy
Head and shoulders or as they appear on the Forex jargon “Shampoo”
because of the shampoo with the same name, are one of many recognizable
and tradable chart patterns. It consists on a high peak in the middle
and two double peaks either side of that one. The higher peak is the
head and the other two lower ones are the shoulders. The pattern itself
looks like a head between two shoulders, hence the name.
11. Trend trading Forex Trading Strategy
FXML’s top analysts use trend trading as one of their leading trading
strategies and always check which side of the trend they are on before
making a trade or signal. The main idea behind ‘Trend Trading’ is
picking a top or a bottom. Novice traders tend to think that trend
trading is easy; just find the trend and trade alongside it. In
practice, it’s not that easy, as with all other aspects of this game,
many dilemmas pop up when trying to identify the trend.
12. Divergence Forex Trading Strategy
Divergence is a leading indicator used by our analysts at FXML and helps
to significantly increase profits. The likelihood of entering in the
right direction at the right time increases if used alongside other
indicators such as Moving Averages (MA), RSI, Stochastichs, Support and Resistance levels etc.
13. Trading the News Forex Trading Strategy
Big announcements or news coming out of different countries can have a huge effect on the market, rendering all our analyses meaningless. In this article you will learn how to use the news in order to make profit.
14. Hedging Forex Trading Strategy
Traders of the financial markets, small or big, private or
institutional, investing or speculative, all try to find ways to limit
the risk and increase the probabilities of winning. There are many Forex
trading strategies out there and hedging is one of them. In fact,
hedging is one of the best strategies to do just that, that's why many
large institutions use it as a mandatory component of their tactics.
15. The Strategy to Trading majors in 2015
Big investors, hedge and pension funds as well as good traders
lay out plans and strategies in advance, usually before the quarter or a
new year begins on both, fundamental and technical outlook. So we are
suggesting a strategy to figure out 2015 in advance.
16. Trading moving averages
As traders, we have to take into
consideration many things. We have to implement different factors and
indicators in our analysis in order to succeed in this business, no
matter if you trade short or long term. These might be fundamental
indicators, technical indicators, or both. On the other hand, we
shouldn´t overcrowd the charts with too many indicators that will
contradict each other and cloud our judgment.
17. Trading the Market Sentiment
We all know that trading in the Forex market is not easy. Sometimes
every technical indicator points to a certain direction but the market
moves in the other direction. Other times the fundamental outlook of an
economy is very bearish for the currency of that country, yet it keeps
moving higher against other currencies.
18. Triangles and Wedges strategy
We have covered most of the important technical chart patterns in our
strategy section during 2015. There are still some strategies left
though. “Triangles” and “Wedges” are two of the 10 most important chart
patterns and in this article we´ll explain how to trade them. It´s true
that they are different patterns, but they are very similar so we´ll
teach both of them in one article.
19. Creating a trading plan- Part 1
We have heard many times that new Forex trader's fail 80% of the time.
That’s because many beginners start trading without a clear plan. A
premeditated plan is crucial when you trade. It´s like going to war
without an attack and a defense plan. Before you go into a battle you
assess your capability, your strengths
and your weaknesses. The same logic applies to Forex, you prepare a
plan that helps you base your trading on your strongest features and
avoid the weak ones.
20. Creating a trading plan- Part 2
A little while back, I wrote about how to build a trading plan. The
trading plan is very important so we thought it would be better if we
only published half of it, the first part. It would give you some time
to practice the first two steps, your available funds and your available
time. This week we are publishing the second part of the trading plan
with the two remaining steps.
21. Elliot Wave Theory: The background
New strategies breathe life into the market, so we are presenting the ‘Elliot Wave Theory’, named after Ralph Elliot. Having nothing in particular
to fill his days, Elliot turned his attention to the stock market
behavior and developed his theorem in later stages of life. Born an
accountant, but retired at age 58 after catching a virus from a trip to
South America. This is one of the oldest trading strategies, first
published in 1938 as a book under the name ‘The Wave Principle’.
22. Trading with the Elliot Wave Theory: Part 2
A couple of weeks ago we published an article where we explained how the
Elliot Wave Theory was developed and how it worked. When used alone as a
principle it’s useless unless implemented in everyday trading. So this
week we will explain how to trade with the Elliot Wave Theory (EWT),
after all that´s what we need it for! When you use EWT you trade the
probability which this system offers;
23. Trading with Ichimoku
The Ichimoku Strategy is an abbreviation of the Ichimoku Kinko Hyo,
which was developed by a Japanese journalist named Goichi Hosoda in the
1960s after 30 years of working within this indicator. This technique
has been popular in Japan for quite some time now and it has gained
popularity in other parts of the world as well.
24. The importance of liquidity in the Forex market
Liquidity has been an important factor since ancient times
and it continues to this day. A person, company or a country can be very
wealthy but if they don´t have enough liquidity or liquid assets they
can bankrupt easily. Very often we hear about liquidity or the lack of
it, especially during the 2008 financial crisis.
