By Madhuri Thakur. Forex Trading strategies — Have you ever wondered about the import-export happening in the countries? Consider, If India exports its Alphonso mangoes to the US, then what will it receive in return? any guesses? US goods? Start Your Free Investment Banking Course. But the Money. The dollars given by the US are converted into Indian rupees, and then they will be circulated for the use in the country. You must be wondering that how this conversion must be done?

By doing some magic tricks or printing the dollars in the rupee form. Below is a forex trading strategies chart from which you can get an idea of what kind of trading must be happening in the forex market. Foreign exchange refers to an exchange of currencies. It is the trading of currencies from different countries against each other. The FX market is the place where different currencies are traded. Nothing but the MONEY. As there is no physical buying or selling of goods, it can be a bit confusing.

It is clear that it is all about the trading of money, but where is the Market or the place where this trading takes place? Hold on!!! There is also a concept called FOREX Market, which is explained in the following paragraph. Forex market is the most liquid market in the World. Basically, you buy one forex trading strategies currency and sell the other for the purpose of making a profit.

The main goal is to make a profit when the exchange rates of the currencies traded move as per your speculation. These trades are placed through forex trading tips broker or market. And the process of placing orders is very easy with just a few clicks. In the next step, the Broker will pass the order to the partner bank, where your position for that order is booked. When you want to come out of trade broker will close the position in the market. Thus as per market conditions, accordingly, credits or debits happens in your forex trading tips account.

In the global market today, businesses today are operating all over the world as products or goods are transferred from one country to another country. Hence in that case, for a successful trade, they need to exchange their currencies. As there are traders or individuals who see the Forex for profit-making purposes. These people if expect one currency to rise against another, then they will make a trade on that currency.

As the forex trading strategies institutes or the individuals trading in foreign exchange receives various prices from banks or other networks, they tend to receive brokerage in trades. In a sell trade, it should be at the most recent high.

The Take Profit level should be at least two times the Stop Loss Value. Some users of this popular trend following strategy hold their position until they get an opposite crossing, but this increases the chances of losing some or all of your existing profits if the market makes a sudden reversal.

This strategy may require you to download a technical indicator for your trading platform. For Metatrader 4, there are lots of Gann related indicators available for free. One of them is shown in the chart below:. When the Gann indicator displayed shows a yellow ribbon, it means that the market has potentially entered a downtrend. The blue ribbon signifies an uptrend. Ideally, you should enter a position just after the close of the candle that triggered the colour switch. The entry candles are marked by the three arrows.

As you can see on the chart, some of the trend switches were false dawns that would have led to a losing trade. However, the positive trades were richly rewarding. This is why you need to be careful with your Stop Loss and Take Profit limits when using this strategy. Many users of this strategy place a Stop Loss limit at the low or high of the signal candle the first candle that caused the switch , depending on the direction of the trade.

They also trade without a designated Take Profit level, trailing the profits instead. This is a powerful range trading strategy that attempts to predict where the market is likely to turn. The logic is that the market will turn bearish at a resistance level, and bullish at a support level. This means that at a resistance level, you enter a sell trade, and at a support level, you enter a buy trade. There are many tools for establishing support and resistance levels.

Some of the options include Bollinger Bands, Pivot Points, Fibonacci Ratios, and more. Choose a specific method and research on it extensively.

With Pivot Points, for example, you can map out the possible support and resistance levels for a day, week or month, and take trades off these levels. Below is a chart of what trading off a support or resistance looks like:. You can see how price reacted at the top of the range resistance and bottom of the range support. If you enter a sell at resistance, your profit target is the support level and vice versa.

The Stop Loss limit should be pips away from the latest high or low before your entry. The pinbar strategy uses one element of Japanese Candlesticks to predict future price movement. The logic is that a pinbar shows that the market is about to change direction—like an arrow created by the behaviours of market participants. It is often used in combination with other strategies like Support and Resistance for a higher probability of success. In the chart above, the red arrow shows a pinbar formed exactly on a support zone.

This market went on to go on a mini bullish run. The profit target when using such strategies can be the next support or resistance zone, or multiples of your Stop Loss value for a good risk to reward ratio. The Stop Loss limit should be placed below or above the pinbar, for buy or sell trades respectively.

The Bollinger Bands is another powerful technical analysis indicator that has been around for decades. It creates a channel around the market movements on a chart.

If the touches the lower boundary, there is a possibility that the lower band will act as a support level and cause a reversal.

This is shown in the image below. Gold real-time quote on Mitrade. In this case, wait for a bullish candle close, and enter a buy trade.

Place a Stop Loss limit a few pips below the latest low. Your target, on the other hand, should be the upper Bollinger band. Still based on the Bollinger Bands, this strategy is designed to help you find the start of a new trend. Before the trend starts, the Bollinger goes into a squeeze.

A break of it in either direction signifies the possible start of a trend. The red arrow in the image shows the squeeze while the green arrow signifies the breakout. In our chart, entering a sell trade at the breakout of the lower Bollinger would have yielded a decent profit. If the breakout happens on the upper Bollinger, it is a buy trade. For a breakout entry, place the Stop Loss limit directly above or below the candles in the squeeze area. To secure your profits, use a trailing stop or a fixed profit target.

Are you trading on Metatrader 4? Here are some important tips you should keep in mind when using any forex trading strategy:. Regardless of how good they look, ALL strategies will have losing trades. Proper money management ensures you don't go into deep drawdown or lose your entire trading account on those three losing trades. Although we have talked about using multiples of your Stop Loss limit as the profit target to ensure a positive risk to reward ratio, you need to be realistic.

Setting a pips profit target on a currency pair that has been moving an average of 50 pips per day over the last one month, is not realistic—especially when you don't intend to hold the trade for long periods. Some strategies do well on all timeframes, while others will only work on the hourly chart and higher. Experiment with various timeframes and choose what works for you. When you have decided on your strategy, stick to it.

Remember, trading is a business of probabilities. You don't know which trade will end in a profit or loss. Keep your emotions in check, follow your strategy strictly, and let the numbers work in your favor. A good forex trading strategy is a must if you are to achieve your dreams of making consistent profits.

Go over the options we have provided in this article, choose the one you feel most comfortable with and test it on a demo account after a backtest. At the end of the test, you can start trading with it on your live account. GO RISK-FREE WITH MITRADE! This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please read the PDS before choosing to start trading.

By Madhuri Thakur. Forex Trading strategies — Have you ever wondered about the import-export happening in the countries? Consider, If India exports its Alphonso mangoes to the US, then what will it receive in return? any guesses? US goods? Start Your Free Investment Banking Course.

But the Money. The dollars given by the US are converted into Indian rupees, and then they will be circulated for the use in the country. You must be wondering that how this conversion must be done? By doing some magic tricks or printing the dollars in the rupee form. Below is a forex trading strategies chart from which you can get an idea of what kind of trading must be happening in the forex market. Foreign exchange refers to an exchange of currencies. It is the trading of currencies from different countries against each other.

The FX market is the place where different currencies are traded. Nothing but the MONEY. As there is no physical buying or selling of goods, it can be a bit confusing. It is clear that it is all about the trading of money, but where is the Market or the place where this trading takes place? Hold on!!! There is also a concept called FOREX Market, which is explained in the following paragraph. Forex market is the most liquid market in the World.

Basically, you buy one forex trading strategies currency and sell the other for the purpose of making a profit. The main goal is to make a profit when the exchange rates of the currencies traded move as per your speculation. These trades are placed through forex trading tips broker or market.

And the process of placing orders is very easy with just a few clicks. In the next step, the Broker will pass the order to the partner bank, where your position for that order is booked.

When you want to come out of trade broker will close the position in the market. Thus as per market conditions, accordingly, credits or debits happens in your forex trading tips account. In the global market today, businesses today are operating all over the world as products or goods are transferred from one country to another country.

Hence in that case, for a successful trade, they need to exchange their currencies. As there are traders or individuals who see the Forex for profit-making purposes. These people if expect one currency to rise against another, then they will make a trade on that currency. As the forex trading strategies institutes or the individuals trading in foreign exchange receives various prices from banks or other networks, they tend to receive brokerage in trades.

From the above table, you might be running in confusion about how the currency code is decided? Forex trading strategies are the simultaneous buying of one currency and selling another. So it is clear that for trading the currencies, we require a pair of currencies. That is, the trader is buying one currency against another currency.

It is expressed in a standard manner,. Here USD, EUR is the base currencies and GBP, EUR is the quote currencies. The quote values are given to the fourth decimal point, i. The first numerical value in the above notation denotes the amount of GBP that is equivalent to one USD. Here the difference between the prices shown is counted to the fourth decimal place, and it is known as a pip.

According to the International Monetary Fund IMF , the U. What is important about this market is its simplicity, liquidity, tight spreads, and round-the-clock operations. Futures: Futures are contracts to buy or sell a certain asset at a specified price on some future date.

It is a binding contract between the two parties buyer and the seller , which allows them to trade a certain amount of currency pair at a predetermined price in future time.

Exchange-traded Funds: Exchange-traded funds or ETFs are an investment fund which is traded on the stock exchanges like shares.

They are invested in a single currency or basket of currencies. As we know, every coin has two sides; we need to focus on the other side as well.

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Remember, this is a long-term strategy. This market went on to go on a mini bullish run. For this simple Forex strategy, we are going to use a day moving average as our shorter SMA, and a day moving average for the longer one. Sounds good? Somebody actually said its impossible to learn trading online and be profitable…do you agree with that?

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