The most profitable Forex strategy: how to create the Holy Grail with your own hands. Rules for successful trading, examples of strategies for non-standard indicators with examples and screenshots
Working strategies for attentive and patient traders
Every trader wants to press the magic button “Get Money” and skim the cream without any actual effort. Alas, only you do miracles in this world and your success will depend on your patience, experience, and perseverance.
The most profitable Forex trading strategy does not exist, but there is a strategy that you will select, prefer and optimize for yourself.
I will only give some advice and suggest a few interesting Forex trading strategies. In this review, you will find not only recommendations for traders but also examples of working strategies with indicator templates and screenshots. Take the first step to your success on the Forex market!
You can find hundreds of various strategies online with one or more indicators, for technical and fundamental analysis, scalping or long-term - there are many options, but none of them will be ideal.
Why there is no perfect trading strategy on Forex:
- Different trading conditions. The trading strategy gives signals for opening a position and the trader's task is to enter the market and close the position on time. The effectiveness of the signals depends on the speed of the platform, your internet connection, information processing by the broker (order execution speed), the size of the spread, the accuracy of quotes, the minimum size of stop orders, etc. For different brokers and different accounts, the effectiveness of strategies may be different.
- Market volatility. Strategies for technical indicators focus on patterns of certain situations. Indicators based on mathematical and statistical analysis take into account price behavior in past periods and based on historical data allow us to predict further behavior of the chart. Despite the wave theory (that says all events tend to repeat), we cannot eliminate the influence of the fundamental factor that can spoil the game. Trading based only on fundamental analysis is also not ideal: at the time of market volatility, it is impossible to say exactly which decision the majority of traders will make.
- Artificial market manipulation. Trading is a kind of competition between traders. Their total capital is all the money on the OTC market, and then it does not just appear out of nowhere. When someone earns, someone else loses. And any increase in market capitalization is followed by a recession. Institutional investors and market makers with large capital have the opportunity to manipulate the market in their favor by pushing out the stop orders of inexperienced traders. Naturally, such behavior is unpredictable, which means that at some point a profitable strategy may turn into a loss-making one.
- The Holy Grail is not the strategy itself, but your skill in using it: choosing the right timeframe, managing to catch signals while observing risk management, and being able to analyze the results (a trader’s journal will help with this (PirateTrade, Marketstat)).
- A perfect most profitable Forex strategy does not exist. Success and effectiveness depend only on the trader and trading conditions. In addition to the constant analysis of the technical indicators, the trader must constantly monitor the fundamental factors that determine the further behavior of the market.
How to become a successful trader:
Get experienced. By trial and error, you need to learn to see the signals and determine their accuracy. Intraday strategies with infrequent signals are best suited for this.
- Learn to evaluate the effectiveness of strategies using methods of mathematical analysis and statistics. Read more about them in this article.
- Follow the news. Often they determine market trends.
- Learn to control yourself: your emotions and mind.
- Spend as much time as possible on professional forums and participate in related events.
Below I suggest you test several working strategies for indicators that are not very famous, but very interesting. I did not develop them, but the number of successful trades they brought me speaks in favor of their use.
Profitable Forex strategies for non-standard indicators
Once again I would like to stress that the effectiveness of strategies depends solely on the skills of the trader, their ability to see signals and analyze the market.
1. Indicator I_XO_A_H and the strategy based on it
Most traders prefer to trade according to the classic line chart, without going into details of other options built into the trading platform. But maybe they should. The Tic-Tac-Toe graphical trading system is one of the analytical options for showing the movement of prices that indicates the direction of a strong trend.
The time interval is irrelevant here. If the price has passed a certain number of points up (for any period), we see a cross, when down – we see a zero. This type of chart cannot be combined with trading volume indicators, but it has several advantages:
- it ignores insignificant price changes (price noise and minor corrections);
- it is not tied to a period;
- it allows you to find trend lines, easily distinguishable resistance and support levels;
- it provides an opportunity to pay more attention to a long-term trend.
This strategy uses the indicator I_XO_A_H together with candlestick analysis. I_XO_A_H is a combined template indicator, which is an attempt to convert the Tic-Tac-Toe graphic system into a histogram.
The trading system itself is not used here directly (it is too visually complex for those who are used to candlestick and linear charts), but its indications are interpreted well by I_XO_A_H. Continue reading with Litefinance.com...