Posted on October 27th, 2008 by admin, under online forex trading.

Forex trading strategies example (part 2)

Let’s continue our discussion of Forex trading strategies that can be used as an independent system. Today we will discuss two more Forex trading strategies.

Trading strategy using Stochastic

Though there is an opinion that it is bad to determine the turning points, stochastic index at large intervals does it quite fairly. I do not recommend to use it for 5-60 minutes, or it is necessary to increase the number of periods (Stoch (35), Stoch (55), etc.) I tried stohastik with the period 14 (by default). According to this system entrance is made after a level crossing signal in the direction of the crossing. The levels are determined by trader since a week-long trend is descending, the lower lath is taken (8) and the upper (75) (by the way it can be slightly higher, input will be even sooner, but not more than 78-80!) Stop must be set rather flat, on percent from the deposit (such as 1.5 from 100K i.e. by 150 pips). Profit can be taken off either at target a*stop where a is coefficientfrom 1 up to 4 (your choice) or on by any other signals (parabola) or the target levels, or sliding stop. On adjustment you can play with signal levels, stochastic period, and also include a short while crossing moving (it is usually always built together) behind the signal level.

Trading strategy of game using Fibo-levels

This is one of the most wide-spreaded systems based on the fact that the price, being corrected, will be a distance equal to the movement multiplied by the coefficient 0.236 0.382 0.5 and 0.618. I Can add that 0.5 and 0.618 meet more often than the rest ones… The signal “get ready” occurs when, after a lengthy movement the price was corrected not less than 0.2-0.3 part of this movement. Fibo-levels are drawn, and warrants on sale/purchase about them, with stop above a following fibo-level are established.

For example: After yen’s falling from 107.15 to 105.20 we draw fibo-levels. (Also we will draw level after falling from 106.70 to 105.20). After correction beginning we set a warrant for the sale of nearly 0,382 correction from a large falling (of almost exactly the same as the 50% correction smaller falling). So Sell USDJPY 105.95, Stop is above 0.5 from a large falling, by 106.30 …

The level has appeared punched and following order is selling about 0.5 from a large drop (note that the level is almost coincided again with a fall of 0.618 less) So, Sell is USDJPY 106.15, S/L 106.50 At this time, level of 50% correction sustained (in this case match of 2 levels in one place has given strong support to bears.)

That is what we have in the future:

The first red arrow indicates the point of entry. Almost 2-day consolidation has followed then. After that, accordingtoo all laws of a genre, falling has continued. The second arrow is indicates re-entry into the market after the correction, which ended precisely about the previous low.

Good luck to you!