A highly profitable Forex Strategy determines whether you will be a successful trader or not. The primary objective of a Forex trader should be to implement a worthwhile strategy. Strategies are the pinnacle of a trade which determines how much profits a trader makes and how much loss he/she minimizes.
There are hundreds of most profitable Forex strategies that a trader can implement depending on his/her curriculum. Some of them are as follows:
1. Heikin-Ashi Trading Strategy
This chart resembles a regular candlestick chart. However, it is different. While a candlestick chart gives 4 diverse prices: High, Low, Open and Close, Heikin-Ashi shows data from previous candles. The Heikin-Ashi chart calculates prices in the following ways:
Open: Average of open as well as close prices of a former candle.
Close: Average of high, low, open, as well as close prices of a previous candle.
High: Chosen from the highest value from any of the open, close, and high price.
Low: Chosen from the lowest value from the open, close, and high price.
In a Heikin-Ashi chart, the candles are correlated to each other as all the current open, close, high, and low prices are calculated using the previous ones. An advantage of Heikin-Ashi chart is that its signals are slower compared to a candlestick chart which can prove helpful during volatile situations. For this reason, this highly profitable Forex strategy is very popular among day traders.
2. Moving Average Crossover Strategy
It is a highly profitable Forex strategy requires 3 moving average (MA) lines: one at 20 periods, one at 60 periods, and one at 100 periods.
The 20-period line indicates the fast MA
The 60-period line suggests the slow MA, and
The 100-period line acts as the trend indicator
This strategy displays a BUY notification once the fast MA goes up the slow MA. Likewise, it displays a SELL notification when the fast moving average goes down the slow moving average. When the price of a stock remains consistently above or below the 100-period line, then it indicates a strong price trend.
Though the moving average lines come fixed in this highly profitable Forex strategy, a trader can set them in any preferred point.
3. Support and Resistance - Role Reversal Trading Strategy
When a price finds cross up a certain level then it is called Resistance. Again, when the price cross down a certain level, then it is called Support! The Resistance and Support levels come in the form of horizontal lines.
Profits of a trade increase when the price of a currency crosses these levels. Traders watch these levels regularly and execute buy or sell order depending on them.
Role Reversal is simply the Resistance becoming the Support and vice versa. During an uptrend, the price creates higher highs and lower lows. In this situation, only long trades can take place assuming the price is going to go up.
When the price continues to go up, it breaks the Resistance level and creates a new Support level. Thus, Resistance becomes a new Support level. These most profitable Forex strategies can work great for beginners and can help them to establish a profitable trading career.
Sign up for a demo account today; use these afore strategies and backtest them to know which one is a highly profitable Forex strategy for you.
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.