Forex strategy is understood as a set of rules according to which work is carried out in the market.
This set of rules describes the conditions under which trades are made, and also includes rules for money management, placing stop loss and taking profit orders, etc.
Depending on what online trading instruments are used in the work of a trader, the following varieties can be conditionally distinguished:
* Indicator TS – the main role is given to indicators. There is a risk that the strategy will cease to be profitable due to the fact that the indicator settings will no longer be relevant. Optimization is possible, but doing it manually is not easy.
* Based on graphical analysis – these Forex strategies are based on graphical constructions and Price Action patterns. This category of trading system does not become obsolete over time.
* Based on Japanese candlesticks – they also do not become obsolete.
* Based on wave analysis – a rare type of TS, usually, wave analysis is used to get a general idea of the situation on the market, but not to find points of entry into transactions.
* News TS – most of all, trading is carried out to catch the price movement after the news release. That is, the trader is trying to catch the impulse price movement.
Calm River Strategy
Most systems based on moving averages use their intersection as a signal to enter a trade. Such a signal is late and often turns out to be false.
The Calm River strategy has its own peculiarity – it uses indicators in a slightly different way.
This highlight of the trading strategy allows you to use signals from indicators with virtually no delay. Our moving averages serve only as guides, and the main signal is given by the price, which cannot be late.
However, the Calm River strategy only works in a trending market.
Both moving averages should be clearly co-directed in one direction, be as parallel as possible, have smooth shapes and resemble a riverbed (hence the name).
That is, in the Calm River strategy, moves are used as indicators of “calmness”, with which the price should interact in a special way.
The entry signal for us will be a price rebound from the moving, provided that the latter maintains a trend position.
Strategy on the Correlation of Currency Pairs
Effective correlation strategies are suitable for lovers of medium and short-term Forex trading systems. This trading system is based on fundamental analysis and assumes that transactions will be opened manually.
By making decisions on his own, a trader can choose the level of aggressiveness of the strategy, placing from 10 to 25 trades per month.
Correlation can be a reliable basis for trading. Indeed, successful TSs are not always based on technical analysis, in which getting signals to enter the market is the result of using indicator readings.
Instead of? in order to trade, looking for cases of coincidence of complex conditions in the market, you can base your Forex trading strategy on correlation – this feature of the market helps to make profitable deals.
Correlation is understood as a similar movement of a pair of assets, which makes it possible to do without additional technical trading tools in trading.
It should be borne in mind that the correlation coefficient can be either greater than zero or less – the selected assets move synchronously if the correlation coefficient is equal to 1, or their movement is a mirror image of each other with a coefficient equal to -1.
If the correlation is between -1 and +1, then the degree of interaction of assets is directly proportional to the value of the coefficient.
It is worth learning how to choose assets correctly, and a profitable correlation strategy is provided to the trader.
Forex ZigZag Strategies
The ZigZag indicator demonstrates the greatest efficiency when working on large timeframes – this is where clear trend movements appear most of all.
On the chart, the indicator looks like a set of zigzag lines that unite local extremes and allow the trader to predict further price movement.
Practice shows that, despite the usefulness of this indicator, a comprehensive strategy based on the ZigZag indicator is more effective, and it is ZigZag that is the filtering trading tool. Most often, traders supplement this tool with common free indicators like moving averages, oscillators (RSI or MACD).
Alternatively, you can choose Elliott waves, Bollinger bands and Fibonacci lines as the basis of the TS, the latter, by the way, has a separate name “Rook” or a trading strategy for two ZigZags. The choice of components of a trading strategy is determined only by the level and personal preferences of the trader himself.
So, for a beginner, a combination of ZigZag and RSI or MACD is enough, and more experienced players can choose the Fibonacci line and trade using such a trading strategy using two ZigZags.
Strategy Black Hole
The TS is based on the knowledge of trading psychology, as well as the postulate that, due to the force of attraction, the price is not able to significantly deviate from the fair price, which is harmonious for the market.
At the same time, the main idea for the market entry point according to the Black Hole strategy is the “expanding triangle” formation, which is typical for key levels.
The price tests such levels repeatedly, after which, finally, it breaks. So the visual consolidation of interest near an important level is gradually gaining the swing of fluctuations, which forms the above figure.
Testing an important level of the price of the currency is gaining momentum, and then the level is still broken – such a formation occurs at the top of the trend and precedes a market reversal.
Therefore, a trader will be able to earn on the reversal itself or on a corrective movement to an important breakdown level.
The Supremacy trading strategy allows you to profit from the mistakes of other traders. The fact is that the statistics will enable us to draw a disappointing conclusion: only no more than 10% of traders regularly earn on Forex.
From here, it turns out that 90% of traders merge deposits. Such statistics can be turned to your advantage if you use them wisely, especially since there are resources where you can see the current state of affairs in the market and the mood of traders.
Such information can be used to decide to enter the market.
As for the main characteristics of the Supremacy strategy, the following can be noted: it is recommended for such currency pairs as USD/CAD, GBP/USD, NZD/USD, EUR/JPY, EUR/USD, USD/CHF, AUD/JPY, USD/JPY, AUD/USD, GBP/JPY.
At the same time, the optimal timeframe will be D1 – for this, you will have to go to the computer twice a day, which is not so much.
The trading strategy is suitable for most working traders who do not have the opportunity to sit in front of the monitor for days, assessing market changes.