The best strategies for trading Forex

The first step necessary to successfully trade Forex is to have a good understanding of its specifics. It is important to be aware of the factors that drive price movements and to be aware of the inherent risks of currency trading.

The easiest way to start is from the source. It will be useful to take the time to research the Forex market yourself and familiarize yourself with the most important concepts. There is a lot of helpful content on the basics of Forex trading in easy-to-understand language on the site FxForex.com.

Traders who have learned the basics can focus on analyzing different Forex trading strategies. These strategies are effective in helping to systematize the way you enter and exit trades. What's more, they make it easier to stick to a previously set plan and resist emotions. Proven indicators and knowledge, for example in the field of mathematics, are used to create most of the strategies. Some of the strategies are more popular with traders than others.

Bollinger band

By Bollinger bands using standard deviation, you can find the current trends in the market a little easier. The indicator consists of three parts: a simple moving average (over a period of 20 days) in the middle, and the top and bottom lines. These two lines may contract or widen relative to the centerline, indicating market volatility (widely spaced bands), or no volatility (bands are very close to each other). Forex traders use this data to independently determine the entry and exit points for their trades.

Fibonacci strategy

The advantage of the Fibonacci sequence, not only in trading on the Forex markets, is its universality and presence in the world around us. The Fibonacci sequence indicates dependencies resulting from the sequence of successive digits 0, 1, 1, 2, 3, 5, 8, 13, 21, etc., each successive being the sum of the two preceding numbers. In the Forex market, it is not so much a sequence of numbers that is used as the relationships between them. The so-called Fibonacci retracements, which with great accuracy help to find the moment when the market is experiencing a potential retracement of asset price movements. As a result, investors can more easily decide when to enter the market.

Bladerunner strategy

The name of the strategy Bladerunner refers to the early 80s movie of the same name. It is compared to a knife that cuts a given price quickly and accurately. In this case, traders compare the current price in the market and what it should be according to the indicator. By analyzing possible discrepancies, it becomes possible to identify the entry and exit points for a transaction. This strategy is often combined with the previously mentioned Fibonacci strategy (risk reduction) and used when the market is in a trend.

Keltner Channel

The Keltner Channel is technical analysis indicatorwhich is based on volatility. Investors use it to make it easier to identify when their chosen currency pair has deviated too far from the moving average. As in the Bollinger Bands mentioned at the beginning, here two border bands (based on 10-day moving averages) are used, which are at the top and bottom of the moving average. At first glance, traders can see the price relationship of the selected currencies. Simply put, an uptrend occurs when the price of the currencies crosses the upper band line, and a downtrend when it drops below the lower band. This channel is all the more representative when it lasts longer.