Best Forex Trading Strategies in 2019 and 2020
There are approximately two types of forex traders. The first group believes that a little luck and a few dollars are all that you need to become a currency trader. Needless to say, they very often fail. There are also some forex traders who use careful planning and constant analysis. Of course, this approach requires much more time, but, on the other hand, this is the only way to get positive results in your trading.
The basis for the success of any professional trader is a trading strategy. To simplify the process of choosing a strategy suitable for your forex trip, we will talk about the best forex trading strategies in 2020.
Here you will read:
- What is a forex trading strategy and how does it work
- The main types of strategies, including: day trading forex strategies, scalping trading, position trading, swing trading, automated trading
- How to check forex trading strategy
- Best forex automated trading strategies in 2019 and 2020
HOW DOES TRADING STRATEGY WORK
- What is a forex strategy and how does it work
- Day trading forex strategies
- Scalping trading strategies
- Swing trading forex strategies
- Automated forex trading strategies
Forex trading strategies exist to make your life easier. Once you choose the trading method that suits you, you will not need to worry about making an important decision at every stage of your journey. Put simply, a trading strategy is a system of guidelines that allows you to follow it step by step and focus on the result, not the process.
It is clear that depending on the goals and resources of each individual trader, their trading strategies may vary depending on the level of complexity and style. The best way to narrow your search for the right trading method is to answer the following six questions:
- How much money am I willing to invest in trading?
- How much time do I have for forex daily?
- What are my financial goals? (For example, you can multiply your initial amount once or make trading your main source of income in general)
- How fast do I want to make a profit?
- What risks am I willing to take when it comes to trading?
- What is my trading experience?
Once you have a clear idea of all of the above, it will be much easier for you to deal with dozens of available trading strategies and there will always be those that are right for you.
Let’s discuss the main categories of forex trading strategies.
Day trading forex strategies
Trading methods that fall into the daily category are very attractive to new traders. The idea of day trading is that quick purchases and sales are made within one specific day. Day traders base their analysis on small time charts, for example, from fifteen minutes to half an hour, and are not inclined to keep their deals overnight. If you decide to use one of the day trading methods, here are some tips on how to keep things under control:
- Limit your risks and set specific deal size limits.
- Stick to a few tools that are convenient for you to use and that you understand well.
- The time you use should be in accordance with your personal schedule. Some trade forex non-stop, and some only have a couple of hours a day to pay attention to the market.
Scalping trading strategies
Forex scalping strategies are based on the idea of collecting many small profits in order to accumulate them in large ones. The key to mastering scalping on Forex is to have a reliable exit strategy, as there is one big setback, and discard all the small victories combined. Successful traders adhere to the following principles:
- A strict set of rules as part of your strategy: for example, avoid keeping your position open at night.
- Solid technical analysis is essential for successful scalping.
- Like everything in trading, scalping comes with experience, so be patient and keep learning on the go.
And last but not least, choose the right broker that will allow you to open and close deals as much as you need, without excessive commission or spread.
Swing trading forex strategies
For those who do not want to wait for months to make a profit with positional trading and find day trading too intense, there are trading strategies on Forex fluctuations. Swing trading focuses on capturing one swing – price changes from the entry point to the moment when it unfolds. However, the move itself can take from a couple of hours to two weeks, so sometimes trading remains open longer than originally expected. Since most swing strategies are based on technical analysis, a huge number of deals will fall into the trend, but the key is knowing when to stop. Usually, an exit plan for swing traders is to take profits immediately before the resistance level. The goal of the swing trader is to minimize the number of moves, including with the help of Price action and trading indicators.
Automated forex trading strategies
The main advantage of choosing automated trading is that the trader may actually be absent from the market while all his transactions take place. This means that the robot itself is going to systematize market data, develop an effective strategy and process transactions. Obviously, this allows the trader using the robot to save a lot of time and also keep calm while the market becomes chaotic.
The disadvantage of automated trading is basically finding the right software. There are many trading robots on the current market. Unfortunately, most of them are not really profitable.
HOW TO CHECK THE TRADING STRATEGY
A successful trading strategy must meet several conditions:
- Has a detailed description of your logic
- Shows positive test results for a period of two years
- Has confirmation on a live account for a period of 6 months
- Has positive feedback from real traders
BEST AUTOMATED FOREX TRADING STRATEGIES IN 2019 AND 2020
Price action strategy “Candelabrum” refers to swing strategies and is based on the reversal candlestick patterns.
Powered by Candelabrum EA since August 2018.
- Risk – low
- Verified history – from August 2018
- Gain – 320%
- Maximum drawdown – 20%
- Split sytem, trailing stop, auto/risk lot
- Minimum deposit – $1000
- Account – Forexchief DirectFX
“True Range” strategy refers to night scalping strategies and uses the grid system in its work.
Powered by True Range EA since February 2019.
- Risk – medium
- Verified history – from February 2019
- Gain – 180%
- Maximum drawdown – 30%
- Minimum deposit – $500
- Account – Forexchief DirectFX