Forex trading strategies example (part 1)

Posted on October 22nd, 2008 by admin, under online forex trading.

Forex trading strategies example (part 1)

We want to present you Forex trading strategies that can be used as an independent system, and in combination with other trade policies, or as the basis for a strategy. In any case all represented is a purely subjective opinion and cannot be treated as the “philosophers’ stone” for Forex.

Forex trading strategy using Bollinger Bands (35,2)

The idea is that once the prices will cross one of BB lines, tracking begins, and as soon as next candlestick being closed, will not punch the BB line, entrance in the direction opposite to breakdown.

Depending on desire, may vary period BB (in our case it was equal to 35), time scale (in our case - 4h) as well as confirmation from other indicators. For example RSI.

Forex trading strategy using game on levels

Here the idea is that the price having once reflecting from some point, will reflect from it again, and if it will pass it, the acceleration will be enough to play in the direction of the breakdown. The figure shows the level of yen, arrows show the direction of the game, the lines around them — a lath stop loss, at whose breakdown position automatically deploys.

As acknowledgement of breakdown or rebound from levels it is possible to use: rebound — if the price was a long way to the top without a correction, on the other movements. Breakdown — the price often “poke” in the level, gradually approaching low rebound (see figure).

Forex trading strategy using Moving Average

Even at the simplest indicators it is possible to build a profitable system. This example has 2 movings with periods of 21 and 70. After the breakdown one of movings by the price standby begins. If prices turned, without having reach the 2nd (older) moving, the entrance is carried out at crossing (or a little earlier), MA (21). Stop-loss is places below a recent bottom (peak). The system has drawbacks - one of them is the false signal at the trend end. However, incomparable advantage is that it always follows trend, contrary to the wishes of inexperienced players to play against him.

Forex trading strategy using MACD

One of the easiest ways to play with a trend. On the graph MACD 12/26 with a signal line 7 is used. The entrance is carried out: For Sale — at movement MACD from a maximum downwards, at care of MACD below a signal line.

Pose closing occurs at MACD the crossing signal line upwards. At achievement of low bottom by MACD, with the closure of the next “Short” a long (turn) opens and now pose will close at crossing MACD signal from the top to down, and will open at crossing from below upwards. And again, until formation of top by MACD… Stop is at a price slightly above recent high (low). The system works well in bright trend on 4-hour or daily, but majority advises to abandon MACD on Flat. Nevertheless, it is possible to play for MACD in range also. To do this you need a 15-30 min interval, and slightly other parameters of signal linesand MACD. I suggest you to play with coefficients and see what will be after. This tool has several hidden features starting from the divergence method finishing to usage of ostsilators over the MACD itself. Everything depends on the willingness of the trader to find his own weapon…