Successful traders have the following 3 weapons in their arsenal:
A full proof strategy in place
Plan to execute the strategy with utmost discipline
Solid risk and money management strategies
These 3 instruments are absolutely crucial in determining your profits and limiting the losses. Here, you’ll get to know in details the first part of becoming a successful trader, i.e., the strategies. Out of all these, choose the most profitable Forex strategy trading for yourself that can deliver favorable results.
- The Bollinger Band Squeeze Strategy
John Bollinger is an American financial analyst who first propounded this strategy. Bollinger Bands are the measurement of price volatility that is above and below the simple MA (Moving Average). He founded that high volatile periods follow low volatile periods and so when the bands squeeze towards both the directions, it can indicate a noteworthy price movement in the future.
In other words, this profitable trading strategy for Forex takes benefit of movements of prices during low volatile periods.
- Momentum Reversal Trading Strategy
This strategy requires a trader to establish mid to long-term trends by analyzing the fundamentals of the currency. A trader needs to examine the market with weekly charts first and then come down to 1 hour, 30 minutes, and 15 minutes charts. Advance money management is one of the prime aspects of this strategy. This allows the trader to plan all the trades in advance and enter the market during low risk and come out with a hefty profit.
The profitable trading strategy for Forex uses the following indicators: Fibonacci Retracements, Stochastic Oscillator, and Support and Resistance.
- 2-Period RSI Strategy
As the title suggests, this strategy uses the Relative Strength Index (RSI) indicator. A signal for going long is generated whenever the 2-Period RSI moves above 90. Again, it generates SELL signal whenever it moves below 10. Owing to the aggressiveness of this strategy, it requires a significant stop loss order. Additional BUY and SELL locations are generated when the market begins to trend in a specific direction. However, these locations should be closed when an opposite signal comes into play.
- The Narrow Range Strategy
Narrow Range is quite same as the Bollinger Band strategy. It is a very short-term trading strategy which seeks to gain from a low to high volatility change. Traders identify candles of the slimmest range from the past week or so. An ideal candle in this situation will have open and close prices which are the closest to those days with high and low.
When to buy: The price climbs above the high of the slim candle.
When to sell: The price falls under the low of the slim candle.
These 4 strategies can help a trader in constructing a successful path in his/her trading career. However, the most profitable Forex strategy trading depends heavily on the person’s life and the time he can spend on trading itself.
To know more about trading in this currency market, stay tuned. Also, do share if you have additional strategies in mind.
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.