On Line Currency Trading Systems and Strategies

Which Forex Trading Strategies Are For You

It very much depends on what you already know, how much experience you have and what suites your particular personality or style.

When it comes to selecting Forex Trading Systems and Strategies , it pays to find a proven Forex trading system. There are endless choices between many off the shelf packages either for purchase or even for free.

The problem with free Forex trading strategies is that they are usually worth what you pay for them. They are not necessarily proven or tested and lack support and mentoring.

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Forex Trading Strategy Review

 

I’ve been trading Forex on and off for a long time. However my studying goes back a long way and never stops. I love online currency trading as much as someone being passionate about solving a riddle of the universe.

It is a huge challenge I’m determined to solve with my disciplined approach. And from my years of experience studying forex, I can touch on the following general strategies out of hundreds of strategies out there. There are unbelievable number of variations in each category but I believe the following are some of the best forex trading strategies:

1  Price Action Trading  Strategy

Price is always king and your P&L is absolutely affected not by your indicators, but only by price. This is trading pretty well naked and using price patterns exclusively to determine entry and exit points.

PA traders use price as a their leading indicator for trading. The basic principal of this trading is that price patterns repeat because of repeated human behaviors.

For a PA trader, anything that obscures the view of the price itself on the chart is not good to their trading. This is the reason why they would never use indicators such as heiken ashi, 3 line break, or anything that superimpose a price point of view. Price is the only way a PA trader can understand the market movement.

2  Forex Trend Trading Strategy

The basis of trend trading is that historically price very often moves in a trend. There are only three basic movements in forex market:

  1. Uptrend
  2. Down trend
  3. Sideways (not trending)

Trend traders take advantage when price is moving up or down, but suffers if the price stagnates or consolidates.

Trend traders rely primarily on trending indicators to screen the noise visible on the chart. Any indicators that obscure the actual price but gives the general direction of the price is valued by trend traders. Thing is, all trend indicators are lagging indicators. Often those trend indicators that attempt to predict the future can be more difficult to make consistent profit.

3  Breakout/Support and Resistance/Supply, Demand, and Volume Forex Trading Strategy

The basis of this trading is that price historically either breaks out of a consolidation period, or bounces out of particular levels. Both BO and S&R traders work a certain price zone where price will either break through or bounce.

BO traders will take advantage of this situation by straddling their position on the edges of the consolidation period.

S&R traders make advantage of this by trading the price reaction from certain levels as well as taking into account possible overbought and oversold areas. They substantially rely on an understanding of:

  • supply and demand
  • volume
  • causes of the consolidation/S&R levels
  • the indicators when breakout/bounce is about to happen
  • what direction will the breakout/bounce go to

Because they trade mainly with understanding, they use limited number of indicators for confirmations 

4  Divergence Forex Trading Strategy

The basis of this trading is that the movement of oscillating indicators often doesn’t follow the real price movement. Price can make higher peaks while the indicators are making lower peaks. These inconsistencies often lead to good trade signals.

Divergence traders rely primarily on the use of indicators to decide when to enter and exit a trade. They are consistently looking for better indicators which display accurate divergence and hidden divergence. Multiple oscillating indicators are also used as added confirmation.

5  Basket Forex Trading  Strategy

The basis of this trading is that there are trade-able correlations between currency pairs. These type of correlations are not necessarily 100% consistent but when certain pairs move in one direction, associated pairs often generally follow. It is applying trend trading to multiple currencies. So basket traders are a bit like jugglers. They view multiple charts at any one time and make their decisions based on a range of multiple inputs. They can trade either a single currency or multiple currencies simultaneously.

The biggest challenge here is understanding when the traditionally related pairs are going to move together. Similar to trend traders, they will often use lagging indicators in determining the trend of multiple currency pairs. 

6  Combo Forex Trading Strategy

This is a kind of jack-of-all-trades trading. It is the combination of anything which can be found to be working. This can be the territory of information overload and analysis paralysis because many different Forex trading methods are giving them conflicting signals. This kind of trading requires exceptional focus and discipline and is NOT recommended for on  online Forex trading for beginners.

7  EA Forex Trading Strategy

EA trading is about automating the strategies by using a software/robot/computer to do their trades. A robot still requires human set up, intervention and monitoring.

The above is by no means an exhaustive list and it is very much open to discussion. Many boundaries between the systems often overlap. Many people combine various methods to suite their own style and preferences.

There are many system which have proven profitable over time.

Single Most Important Secret to Becoming a Successful Forex Trader

 

Like anything else in life, the only way to get really good at something is to practice. Practice combined with a great teacher or mentor is a formidable start to becoming a successful professional Forex trader.

FOREX Mentor Pro is a highly effective system, giving you the best opportunity to learn Forex Trading and transform your knowledge into Making Money.

 

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