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Is there a profitable forex trading strategy

TOP 3 most profitable forex strategies,1. Choose the Right Broker for Trading Forex

This trading strategy is based on an Analyzing a Moving Average is a “Profit Parabolic” trading strategy based on a Moving Average. A universal strategy, often recommended as the best 3 Pillars of a Profitable Strategy. There are 3 Pillars to every and all profitable strategies and they are: Frequency, Win-Rate, and Risk to Reward Ratio. We can define Frequency as the 27/2/ · Trading Forex profitably necessitates the use of a well-defined strategy. There is no right or wrong approach to trade; what matters is that you choose the one that works best for What is This Simple Profitable Forex Trading Strategy? In this trading strategy, we use 50 simple periods moving average to determine the market trend and use bullish and bearish 31/10/ · A trading strategy is considered profitable if it has a positive result in backtesting and/or forward testing. The results have to meet the return requirements of the trader, and go ... read more

Learn how your comment data is processed. Skip to content Search for:. Is Trading Forex Profitable or Not? Is Forex Trading Profitable? Like this: Like Loading Top 5 Forex Trading Books for Forex Traders. Top 10 Benefits of Forex Trading. Pingback: Trade forex with Your Job Career in Forex Market. Pingback: CFD and Stock - Which is Better for Trading.

Pingback: When to move from demo Account to live in forex trading? Pingback: Want to invest in Forex? Here are top 5 tips from expert. Pingback: Forex trading step by step guide for beginners. But we did get a bearish engulfing candlestick after the break and pullback AKA after the breathing stage,.

Now here we consider the marked pullback as the breathing stage. In the breathing stage, any bearish engulfing candlestick pattern is qualified to place a sell trade. Have a look at the above chart. Just like the previous example, we did not get bearish engulfing candlestick at the initial breakout. But inside the breathing area, we got multiple bearish engulfing. All of these candlesticks inside the breathing area are qualified to go short. When using this trade entry technique, most of the time we get into the trade in the middle of the trend.

We wait for price action to pull back and touch the 50 MA and then wait for a bearish engulfing candlestick to place trade. According to the above, you can see that price pullback to the 50MA and touched it.

This is a valid pullback. Now, all we need is a bullish engulfing candlestick to go long. As expected we got a bullish engulfing pattern and after that price shoot like a rocket. As you already know this simple forex trading strategy is highly based on the small risk and higher reward. Assume you had a bullish engulfing candle and you should place your entry at the closed on that candle.

Next, measure the size of that bullish engulfing candle in PIPs and place your stop-loss twice that distance. For example, if the size of a bullish engulfing candle is 7 PIPs, then your stop-loss should be 14 PIPs.

According to the above chart, you can see that we got pullback trade entry as the marked bullish engulfing candle is closed.

So our trade entry should be there. Now, the size of that candlestick is 7 PIPs, therefore Stop-loss should be 14 pips which is twice that candle.

This is how you place the stop loss when trading with this simple profitable forex trading strategy. We can also avoid larger drawdowns by cutting losses. If you can follow the above rules without letting your emotions affect your trading decision, you can become a profitable trader and a professional risk manager in no time.

Step 1 — If Price Break Above or Below the Engulfing Candle, We Should Close the Trade Manually. Assume you saw a bullish engulfing candlestick pattern and decided to take a long position. After that, the price break below the trade entry and closed below the bullish engulfing candle. When this occurs, the bullish engulfing is no longer valid, and there is no reason to keep the trade open.

Therefore, we should cut our losses as soon as possible by manually closing the trade. This way we can stop a trade turn into a bigger loss. First, we can see that there is a bearish engulfing candlestick pattern that occurred after price break below the 50 SMA and this is a valid trade entry as well. What happened after we went short? Within two candles price went up and closed above the bearish engulfing candlestick.

Which mean our trade entry got invalidated. Now What? Simple, as a trader and as a Risk Manager, you should cut your losses because our trade entry got invalidated and there is no reason to keep hoping that this trade will turn in our direction. In this step, we are giving some time period to see how the trade plays out. If the trade has the momentum to move in our favour within that time period we gave, there is no problem.

Simply because the momentum is not in our favour. According to the above chart, we got a breakout entry with a strong bearish engulfing candle. This is our trade entry and we can place a short trade here. Now in this scenario price never tried to close above the entry candle. This is how you take control of your losses and keep your losses short, so that when you hit winning streaks and bigger winners you asymmetrically compound your gains.

According to the above chart, we got a strong bearish engulfing entry signal following the break of the 50 SMA. We can place a short trade there. Right after we executed a short trade, momentum began to kick in and price began to move in our favour, eventually reaching our 1R profit target. Have a look at the red stop loss line. This is the third step on how to cut losses. At this point, there is little to no risk on our trade.

We dramatically reduce the risk of our trade using these simple trading techniques. Step 4- When the price move 1. This is where we turn our risky trade into risk-free trade by moving the stop loss to breakeven after the price reached 1. Just like the previous example, in here price first reaches to 1R level. But in here price did not stop after reaching 1R profit level, it moves down and hit our 1. So, to some extent, this might be just a question of focus and meaning.

This trader will then either wipe out their account or maybe triple it, which would then probably lead to another over-leveraged trade with a similar result. While there is some logic at work here — a series of winning, highly leveraged traders would a way to make a huge return quickly in theory — the odds against such a gamble resulting in anything except a blown account after a few trades are vanishingly small.

It is also worth remembering that lower leverage makes it easier to control and limit risk, which is a key factor in long-term profitability. So, the first thing you can do is only use very low leverage or even no leverage.

In practice, this means not risking more than 0. You need to wait for opportunities where you think the market is putting the odds in favor of either long or short trades, and then take the trades according to your plan. If you do not have a strategy to identify those opportunities, then you will be groping in the dark.

One of the strategies which has worked best in Forex markets over recent decades is to trade breakouts to new day highs or lows on these two major currency pairs , using relatively tight stop losses and some kind of trailing take profit. Pullback trading strategies can also be used to trade Forex currency pairs profitably while they are in strong trends.

Most of the time, Forex pairs range: if the price goes up one day, it is most likely to go down the next day. Trading strategies which rely upon fundamental analysis are arguably less successful in Forex, but fundamental analysis can be used to effectively filter trade entry signals generated by technical trading strategies.

It is important not to get depressed or frustrated by losing trades — remember, it is all part of the plan to have some losing trades, and it is not a big problem as long as you are keeping individual trade sizes small.

You should expect losing streaks, which you will more than make up for during the winning streaks. Paradoxically, Forex trading can only be profitable when you are prepared to accept the possibility of meaningful losses, even if they are only temporary. Yet, you must be consistent as if you stop taking trades, you will probably miss winners which would have made the difference.

It is important to control your emotions — most traders get emotional, but profitable traders find a way to stop their emotions from ruining trade execution. In Forex trading, profits tend to come irregularly, so it is best to look at long-term performance as the most profitable performance possible. Results can vary and there is no guarantee of profit, but good Forex traders tend to outperform stock market benchmarks. Bottom Line Although Forex trading is not profitable for most retail traders, you can put the odds of profitability in your favor by using very low or no leverage, keeping your maximum risk per trade low, and following an effective trading strategy without getting greedy or impatient.

FAQs Can you get rich by trading Forex? However, outperforming stock markets over the long-term is a realistic goal.

Before we get started, let me tell you something. If you follow the guidelines outlined in this article and implement the approach as instructed, I am assured that you will be able to make consistent profits month after month. This is a simple yet highly profitable forex trading strategy. The focus of this strategy is to cut our losses short and gain as much as possible. The main driver of this strategy is the Higher Returns and Small Losses. Also, when developing this trading strategy we followed the popular term KEEP IT SIMPLE STUPID.

Hence, all the trading signals are generated by the trading system and all you have to do is to place your orders and manage them according to the rules of engagement. In this trading strategy, we use 50 simple periods moving average to determine the market trend and use bullish and bearish engulfing candlestick patterns to get into trades. Basically, when trading this strategy, after determining the trend, we will ride that trend to gain as much as possible.

Also if the trade is not going in our favour, then we immediately cut the losses. For example, have a look at the charts below. It represents how a profitable trade and a losing trade looks like. With these kinds of returns, achieving consistent monthly gain is simple.

For extra clarification, have look at the excel screenshot of our trading journal. It represents how the profitable trades and losing trades are distributed.

In the above chart, we got a total of 15 trades. Among them, we only had two massive 60 PIP winners with some small winners and all others were losing trades. That is the beauty of this trading strategy. Now I hope you got a brief idea about how this simple profitable forex trading strategy is going to work.

Personally, I am a huge believer in keeping things simple. First, head over to tradingview. com and open a free account. Then follow the below video to set up your tradingview chart. Ok, Tradingview is now ready. But from which platform are you going to place the trades? Also, we are using a Minutes timeframe for this strategy. So make sure that you are on the right timeframe. If you want to make a consistent profit each and every month, you need to take control of your emotions. Related: How to Control Emotions Ups and Down When Trading Forex — Trading Psychology.

Since we have tremendous returns in this trading strategy, these small emotional problems will not be big deal. Consider this: even if you have a poor win rate, you can still be profitable due to the higher risk to reward ratio. So you can be a calm trader since the win rate cannot bother you anymore. When it comes to this trading strategy, the main objective is to decrease the size of losing trades while simultaneously exponentially increasing the gains of winning trades.

When trading the forex market, Losing trades is one of the most common market events that can harm us, right?

Due to the higher risk to reward ratio, losing trades cannot hurt you anymore because you have a gut in your exponential higher returns.

This is a significant step in the direction of becoming a successful trader. As you know, our trade entry is bullish and bearish engulfing candlestick patterns, and the best thing is, you have nothing to do.

Every trade signal is generated by itself in the chart, so just relax and execute. We have three types of trade entries in this simple profitable forex trading strategy. This trade entry technique was developed to catch the trend early as possible or in another word, I can say that this is the first attempt to catch the trend. Basically, we are waiting for bullish or bearish candlestick to break the 50 Simple moving average.

Have a look at the marked area in the above chart yellow circle. On there we can see that a strong bearish candle closed below the 50 Simple Moving Average. This is what I call initial breakout entry and this is a bearish trade signal. In the next chapter, we are going to talk about how to manage risk Setting stop-loss and cutting losses.

On the marked area in the above chart, you can see a bullish engulfing candlestick pattern break and closed above the 50 Simple moving average. This is our buy trade signal. Now, what happens if we do not get bullish or bearish engulfing candles when the price break the moving average? What happens if it is just a regular candle? Which is…. I use this trade entry technique if I were unable to get into the trade on the initial break of the moving average. In here I wait for the market to slow things down after the initial break of the moving average, then like the previous example, I use bullish or bearish engulfing candlestick patterns to execute the trade.

But we did get a bearish engulfing candlestick after the break and pullback AKA after the breathing stage,. Now here we consider the marked pullback as the breathing stage. In the breathing stage, any bearish engulfing candlestick pattern is qualified to place a sell trade.

Have a look at the above chart. Just like the previous example, we did not get bearish engulfing candlestick at the initial breakout. But inside the breathing area, we got multiple bearish engulfing.

All of these candlesticks inside the breathing area are qualified to go short. When using this trade entry technique, most of the time we get into the trade in the middle of the trend. We wait for price action to pull back and touch the 50 MA and then wait for a bearish engulfing candlestick to place trade.

According to the above, you can see that price pullback to the 50MA and touched it. This is a valid pullback. Now, all we need is a bullish engulfing candlestick to go long. As expected we got a bullish engulfing pattern and after that price shoot like a rocket. As you already know this simple forex trading strategy is highly based on the small risk and higher reward.

Assume you had a bullish engulfing candle and you should place your entry at the closed on that candle. Next, measure the size of that bullish engulfing candle in PIPs and place your stop-loss twice that distance. For example, if the size of a bullish engulfing candle is 7 PIPs, then your stop-loss should be 14 PIPs. According to the above chart, you can see that we got pullback trade entry as the marked bullish engulfing candle is closed.

So our trade entry should be there. Now, the size of that candlestick is 7 PIPs, therefore Stop-loss should be 14 pips which is twice that candle. This is how you place the stop loss when trading with this simple profitable forex trading strategy. We can also avoid larger drawdowns by cutting losses. If you can follow the above rules without letting your emotions affect your trading decision, you can become a profitable trader and a professional risk manager in no time.

Step 1 — If Price Break Above or Below the Engulfing Candle, We Should Close the Trade Manually. Assume you saw a bullish engulfing candlestick pattern and decided to take a long position. After that, the price break below the trade entry and closed below the bullish engulfing candle. When this occurs, the bullish engulfing is no longer valid, and there is no reason to keep the trade open. Therefore, we should cut our losses as soon as possible by manually closing the trade.

This way we can stop a trade turn into a bigger loss. First, we can see that there is a bearish engulfing candlestick pattern that occurred after price break below the 50 SMA and this is a valid trade entry as well. What happened after we went short? Within two candles price went up and closed above the bearish engulfing candlestick. Which mean our trade entry got invalidated.

Now What? Simple, as a trader and as a Risk Manager, you should cut your losses because our trade entry got invalidated and there is no reason to keep hoping that this trade will turn in our direction. In this step, we are giving some time period to see how the trade plays out. If the trade has the momentum to move in our favour within that time period we gave, there is no problem. Simply because the momentum is not in our favour. According to the above chart, we got a breakout entry with a strong bearish engulfing candle.

This is our trade entry and we can place a short trade here. Now in this scenario price never tried to close above the entry candle. This is how you take control of your losses and keep your losses short, so that when you hit winning streaks and bigger winners you asymmetrically compound your gains.

According to the above chart, we got a strong bearish engulfing entry signal following the break of the 50 SMA. We can place a short trade there. Right after we executed a short trade, momentum began to kick in and price began to move in our favour, eventually reaching our 1R profit target. Have a look at the red stop loss line. This is the third step on how to cut losses.

A Simple Yet Profitable Strategy,Post navigation

19/7/ · 1) Trail stop Parabolic: + units of risk / + per trade. 2) Trail stop Tenkan: + units of risk / + per trade. 3) The average reward (half Parabolic and half via 31/10/ · A trading strategy is considered profitable if it has a positive result in backtesting and/or forward testing. The results have to meet the return requirements of the trader, and go This trading strategy is based on an Analyzing a Moving Average is a “Profit Parabolic” trading strategy based on a Moving Average. A universal strategy, often recommended as the best I feel like its important to have a trading style that fits your personality and how you learn. For me, I seem to still prefer doing it my own way. For example, I use different strategies to find my What is This Simple Profitable Forex Trading Strategy? In this trading strategy, we use 50 simple periods moving average to determine the market trend and use bullish and bearish 3 Pillars of a Profitable Strategy. There are 3 Pillars to every and all profitable strategies and they are: Frequency, Win-Rate, and Risk to Reward Ratio. We can define Frequency as the ... read more

Every trader must keep in mind though, that his version of what profitability is, is what he should focus on. You could enter in when the candle goes through the kiyjin, but the ichimoku averages also act as dynamic support and resistance. The last profitable forex trading strategy that nobody will tell you is to get one-on-one hands-on trading with expert traders. I NEVER risk a Trade to get a few pips of profit. In this trading strategy, we use 50 simple periods moving average to determine the market trend and use bullish and bearish engulfing candlestick patterns to get into trades. Price action is regarded as a representation of price movements in the market.

On there we can see that a strong bearish candle closed below the 50 Simple Moving Average, is there a profitable forex trading strategy. The same goes for trading. pionex bot trading Read More ». September 9, at pm. My Supply and Demand Trading is the Profitable Forex Strategy that concretely makes my Fortune. This phenomenon can be observed when the value has never been bullish or bearish, which would change the pattern of price movements to diagonal.

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