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Effective Forex Trading Strategies

Traders apply many forex trading strategies, which differ in the complexity levels or intended purposes. Still, their key function is to define how you can enter and exit market trades with the help of different indicators that serve to keep track of primary price levels.

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To this end, traders use specific online platforms, for example, meta 4. The platform has a simple user interface, so you can quickly access various flexible trading systems and professional technical analysis. You may use this platform to trade different markets, including forex, cryptocurrencies, indices, and commodities.

This platform is highly customizable to any individual trading need. Also, you may apply it to automate your trading by using unique algorithms that open and close trades on your behalf according to a list of set parameters. Besides, Meta Trader 4 is compatible with Windows, Mac, Android, and iOS.

Some Effective Trading Strategies

Experienced traders know that one strategy cannot help you produce successful trades regularly. If you know how to apply and adapt a trading strategy to particular market conditions, you may become a successful trader.

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You should permanently improve your professional skills, copy trade strategies demonstrating the best commercial results, and analyze the best trading practices.

You can use such platforms for traders as mentioned above, where you will find helpful advice, share your experience, and learn about the most successful trading strategies.

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These are the most used strategies:

1. Fibonacci strategy

In this strategy, the critical level is the golden Fibonacci number, 1,618. The Fibonacci method consists in using analytical tools to identify support and resistance levels in the market.

The strategy allows you to find the critical support and resistance levels to buy as low as possible in an uptrend and sell as high as possible in a downtrend.

2. Breakout strategy

The principle of this strategy is simple: the trader starts to act only if a price breaks a certain line. If it is an uptrend, buy deals open. If it is a downtrend, selling kicks in. When the trend is sideways, you can both buy and sell, but it is better to wait until the price starts a new strong movement.

In the forex market, a trade is entered immediately at a breakout without waiting for the breakout bar to close.

3. Momentum indicator strategy

The momentum indicator is a technical indicator that shows the strength and direction of a trend and its further development potential.

It is suitable for market analysis and shows the highest efficiency in long-term trading.

4. Moving average crossover strategy

This is a simple strategy based on two standard indicators, fast and slow EMAs, overlapping.

A stop-loss for a long position is set at the level of the lowest price in the most recent bar before the crossover. A stop-loss for a short position is established at the highest price in the most recent bar before the signal emerges.

A take-profit depends on the stop-loss. If a new crossover occurs before the stop-loss or take-profit is triggered, it is necessary to close the position.

5. Trend trading strategy

This strategy is straightforward. If a current trend is observed for more than half an hour, the probability that it will last at least another 10 minutes is very high. And you can take advantage of this by opening positions for 7-10 minutes.

The strategy does not provide for any restrictions on the size of investments.

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Summary

You may use these or any other strategies, but it is helpful to follow some simple steps before you start trading:

  • Research the forex market before opening a position.
  • Learn about the drivers that influence currency prices, as many factors may force them to fluctuate.
  • Make sure you realize the risks since the forex market is highly volatile.

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