Most Effective Forex Trading Strategy - All About Forex

Most Effective Forex Trading Strategy

Most Effective Forex Trading Strategy – What are the best Forex trading strategies? This is, of course, a question I am asked many times a day and it is very important. When you start selling, you need to commit to a certain way of selling and focus all your attention and energy on making it work. Many traders never do that and fall into the trap of system-hopping. In this guide, I will explain the difference between different types of strategies, what is their basis, when they work best and what you should know when choosing a forex trading strategy. We will cover the following trading strategies: #1 Following Trends #2 Pullbacks #3 Reversals #4 Fraud (#5 Macro) As you will see, each trading strategy and strategy tries to capture different market trends. This will also be one of the key takeaways because I believe strongly in training. Instead of trying to sell all the time, you should choose a specific market trend and try to be the best in it. #1 Trading Strategy Following Trends is how most traders start and sayings like “trends are your friend” have been around for decades. Trend Following, as the name suggests, is a trading method where the trader should wait for a fixed trend before jumping into the market. Therefore, traders who follow the trend will have to wait patiently until the real trend appears. The screenshot below shows part of the market movement that is usually taken by trend traders. The red areas show the turning markets and the blue areas are the next steps. Many newcomers make the mistake of wanting to predict new trends before they exist and jump right in at the start. Those traders, although they believe they are traders of today, are actually traders of the past. Then, there is also a difference between following the first and last steps. Since the following traders have to wait until the process is confirmed, the question that arises is: when is the process confirmed? The first trend traders are trying to enter new trends too early which can result in too fast and too fast a false signal. The advantage is that the potential reward/risk ratio is very high. Today’s traders await further confirmation. It is possible, of course, that it is late, but their symptoms are usually strong. The trade-off is that the reward/risk ratio is not high while the winrate is high. When it comes to trading instruments, the next steps a trader can choose from are different. Momentum indicators like MACD, RSI or STOCHASTIC are often preferred. In the screen below, the STOCHASTIC is being plotted and one way to enter the next trade is to wait until the STOCHASTIC reaches a low or high. Many traders make mistakes and believe that this can indicate a completely negative conversion. STOCHASTIC very high or low indicates a strong trend. Yes, moving averages are another popular trend-following tool. Two moving averages work well as a crossover indicator in the screenshot below. Whenever the averages are exceeded, a new trend begins. The good thing about the cross-over system is that traders stay away from picking tops and bottoms because moving prices need time to cross. The Ichimoku symbol is another form-following tool. It is similar to the moving average crossover system but the features are different. A traditional Ichimoku entry is given when the price breaks out of a “cloud” while the two Ichimoku lines are moving in the same direction. #2 Pullback trading strategies Pullbacks are a different type of trading strategy. Pullback traders look for established trends and trade in what are called corrective measures. Correcting price movements in the opposite direction to the underlying trend. In the screen below, the market was in an uptrend and pullbacks (corrections) are short periods when the price moved sideways or against the direction of the trend. The price usually moves in these rising and falling waves and the drag trader uses this factor to balance his trades. A trailing trader waits for the price to move to the side of the trend or until he enters a trade when the market declines. The second risk is that the pullback will not reverse. But the upside is that the reward/risk ratio can be great. The market does not always give returns. The example on the left shows a market that has dropped in price recently but has not reversed. The second and third levels had many pullbacks and provided great entry opportunities for the pullback traders. As you can already see, pullbacks and trend following trades have many overlaps and trend following traders often sell pullbacks as a natural continuation. Of course, there are many different ways how pullbacks can form on your charts. In the screenshot below, there are 3 examples. Double pull Price retraces the level twice before continuing the trend. Dirty pullback Price crossed the previous high area and made a deep correction. Quick return Price stopped at a break point and walked sideways for a while before continuing on the path. Moving averages are a popular trending tool as well. If the price is in a moving market and returns to the moving average, the pull can be sold. Either way, the trader trades the price when it reaches the moving average or waits until the price resumes the direction of the trend. As we will see when we talk about breakout trading, we can also trade so-called price patterns such as pullbacks. In the picture below, the price was in the clear area where the head and shoulders were formed. In such cases, the head and shoulders pattern becomes a pattern to follow and can be seen as a pull. The lines between pull and follow are blurred here. #3 Reversal of sales methods Reversals are conversion points and revisions that identify the true source of new trends. Therefore, transaction reversal can be considered as the first process that follows the transaction. However, it is often more effective to choose between the traditional method and the recovery because each trading method has its own unique characteristics. The screenshot below shows a chart with different market segments and trend segments. Following today’s marketers will often go for a beginner or senior model. A reverse trader starts paying attention to the market when the market enters a bullish phase. This usually happens when at least 2 or 3 wave patterns are formed. The risks of being a reverse trader are still small and they always work in the opposite direction. Many failed traders try to predict the turn in the market before it happens. Greed drives traders here because they believe that once they start, they can enter the perfect up/down and, thus, get a high reward/risk. When it comes to recovery tools, segmentation is the standard emphasis. RSI divergence shows the completed trend when the strength of the trend ends. If the traditional trend gives you the RSI divergence, a reversal is likely to occur. The RSI is usually a trend indicator, but if the RSI shows that the trend is weakening, it can be very useful as a reversal tool. MACD or STOCHASTIC can be used as reversal tools. I see it as a retrograde or early trend following trader. I have never been comfortable chasing trends as a trend follower and when I understood that reversal does not mean predicting a reversal before it happens, reverse trading became a “fun” way to trade. #4 Breakout trading strategy Breakouts can occur during follow-up and during retracement of trades. Divergence time is usually the link between two current events. Explosives describe departures from the integration process. Consolidation patterns, as shown in the screenshot below, can occur at the market reversal point (up and down to return) or within established patterns. The screenshot below shows that merge and exit links between two market segments. Consolidation can occur at a market reversal point and breakouts can be signs of a reversal. If the integration occurs during the confirmed process, the output occurs following the process signal. The screenshot below shows this structure and it becomes clear how breakouts connect different parts of the market. As a seller, it is often best to choose a specific type of breakdown. Trying to sell each explosion can lead to bad results and confusion because each part of the market behaves differently and, therefore, requires a different set of tools, indicators and understanding. Traders who break pattern traders and exit traders are often looking for

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