Forex is an open trading market which fascinates many new and old traders around the world. Most of this is because of its high-profit leverages; although a lot can also be associated with so many ‘best strategies Forex trading’ put up online.
Because its tendency to make profits is limitless and the market’s access guides are easy to find, more people have started getting into this system. However, new traders should always take some time off to learn the intricacies before going big on investments. Here are some of the trade strategies one can use to get the hang of things.
Dual Stochastic System
Considered the best strategy of Forex trading by many trade bloggers and forums, this system involves using both fast stochastic and slow stochastic indicators. The trick is to look for both lines to be on both extremes.
People can also use the 20 exponential moving average (EMA) as an additional indicator, although this isn’t absolutely necessary.
Traders have to set both their stochastic lines by the following parameters.
- Slow stochastic Line
- Fast Stochastic Line
The color of both lines is up to the trader.
Once traders can see the price trend going strong, they should wait for both lines to move towards the two extremes. The slow stochastic line’s extreme low is 20% and the fast’s high is 80%. After this, they should keep an eye for an appropriate candle pattern to make an entry. This should generally signal a reversal which follows a short 20 EMA retracement.
This is the best Forex strategy for free!!
London Hammer Trade
Considered a prime option for the London session opening, this trade creates a better chance of profit with its current instability in the European market.
It is also one of the best strategies Forex trading for a time frame. The main component in this trade is the Rejection Bar candle stick a.k.a. The Hammer.
Traders should look for hammers that form after price has gone outside a narrow range of motion. Once a hammer reaches close to resistance, traders can make buy/sell moves depending on the direction of the hammer.
A tight stop loss point can be set not far below the tail of the hammer to hedge your trade. After profit has reached higher than 2:1 ratio, the stop can be moved to the breakeven point.
Rookies should know how to track the hammer as the European session opens. This is the pivotal point of the trade.
These two trade strategies have been used by many experts to gain massive momentum in their Forex trading. If followed correctly and understood well, they can also be successful with novices.
However, one must remember, that even though these are some of the best strategies Forex trading they can find online, it is not fail-proof. In fact, the golden rule of Forex is to stick to a plan even in adversity!
Profits come with better understanding and perseverance.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.