When this occurs, the bullish engulfing is no longer valid, and there is no reason to keep the trade open.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. Right after that, we can move the stop-loss to breakeven and take all the risk out of the table. Now we have no risk attached to the trade, next, all we have to do is to let the trade play out and manage the trade as the price move in our favour. Managing trade is easy.

You just have to trail your stop loss while the price move in your favour. As previously stated, after a trade has hit 1. The next question is how we will manage our trade and profit after the price has reached 1.

So, managing a trade is not that difficult, especially because we apply a set of rules that are simple to follow and execute. For example, when the price is 3. That way we can leave 1. Have a look at the chart below. First of all, have a look at the trade entry. This is an initial breakout entry. Because we got a bullish engulfing candle on the initial breakout and with that, we placed a long trade. Right after the trade entry, the price moved in our favour without taking much time.

As the chart is shown above, price pushes all the way up to 2. Which mean we should trail stop-loss to 1R in the profit. That is what we did the above. What happened after the price reached 2. Market reverses in the other direction, right? Fortunately, we had our stop-loss at 1R. Therefore we were able to book 1R profit without giving all the unrealized profit back to the market. One last thing, when trading with this simple profitable forex trading strategy, you should place your Take Profit order at 5R.

Have a look at the above table for reference. Is this simple trading strategy suitable for you? Is it compatible with your daily routine? Is it a good fit for your personality? Note that not all the trade opportunities are highlighted, and that a few of the trades would have resulted in a small loss.

This is typical of a scalping strategy. This is where trade volume comes into play. The majority of the trades taken on the chart would have been winning trades, and as a result, the scalper would have closed the day with a profit. There are quite a few day trading strategies that many Forex traders swear by.

They all revolve around the basic three ways of day trading which are trend trading, counter trading and breakout trading, usually being among some of the best Forex strategies. This profitable forex trading strategy can be seen as a classic go to strategy for day traders. It is usually one of the first strategies and most simple strategies that Forex traders learn.

For this version of the moving average cross we will be using three moving averages on the hour chart. To follow this strategy a trader should set three moving averages to the following periods: 20, 60 and To produce a buy signal, the fast-moving average 20 MA has to cross UP over the slow-moving average 60 MA.

To produce a sell signal, the fast-moving average 20 MA has to cross DOWN below the slow-moving average 60 MA. In this USDJPY H1 chart, the fast moving 20 MA is the yellow line.

The magenta line shows the slow 60 MA. The green line is the trend indicator. As indicated by the area encircled in red, the 20 MA crosses down below the 60 MA indicating a sell signal. The price moves down in a strong bearish movement before tapering off when forming a double bottom pattern, which has been underlined in red. This is the area where it would have been wise to take your profit. As you can see the market made a sloppy cross over but this formed while the market was moving in a range.

Therefore this signal has to be ignored. Using this strategy, any signals formed in a range formation can be dangerous to follow. They are not as reliable as signals formed in trends. The range broke, and the fast 20 MA crossed UP strongly over the slow 60 MA. The strong upward movement that followed is further indicated by the yellow arrow.

Another thing to note is that you can tell that the previous signal that formed in the range was not reliable, because the trend line did not change direction.

Moving out of a down trend the green trend line was above both the 20 MA and 60 MA. When the signal was a clear one, the trend line dipped below the two moving averages. Transparent price history, tight spreads, fast executions on over 90 currency pairs. As the name suggests with this type of trading, you will be looking for areas of weakness in the market, where price is more likely to swing. This means targeting areas of resistance, or areas where you think the price will retrace to, before continuing along the trend.

Because swing trading is so highly dependent on the peaks and valleys of the market, knowing if the market is trending and the direction of the trend is essential with this type of trading. It is therefore essential that any profitable forex strategy tailored to this type of trading be based on the support and resistance levels that price action creates, so that you can determine where the market will probably change trend direction, or retrace.

Like the above picture suggests this type of swing trading uses the 20 SMA line to determine the trade, and the Relative Strength Index RSI is used to measure the strength of the trend.

It is noted that this type of system like most swing trading systems work best in a trending market. Also, unlike the typical swing trading strategy, it works very well on both the 4H and Day charts.

To follow this system, set your 20 SMA simple moving average and set your RSI to 5 days. Also put in the 50 RSI level on your indicator as well. There should be three horizontal lines on the RSI. These are the RSI levels. The 50 mark is in the middle, and this is the line we will be using to help relay whether the entries that we observe on our chart are strong enough for us to take.

To determine the direction of the trend we use the 20 SMA line. If the price is above the 20 SMA, then it is in an uptrend. If the price is below the 20 SMA, then it is in a downtrend. With the RSI, we use it to determine when a rally is actually becoming a retracement. When price bounces back. The rules with the RSI are as follows. As you can see with this chart, the areas circled in orange are viable buys that we identified with this strategy.

Each of them would have rewarded about three times the risk that it took to make the trade, had we placed the buys. The areas circled in pink, we would not have taken as they barely touched the 50 SMA line before returning up.

This gives a trader more time to confirm the market moves and check the fundamental factors. MA is a standard MT4 tool, the rest two indicators can be obtained for free in the archive via this link. Past the indicators into the folder and restart the platform. The price breaks through the orange line of Trend Envelopes upside.

At the same candlestick, the down orange line changed into the rising blue line. The candlestick is above LWMA. When the previous condition is met, expect the candlestick above the MA to appear. The candlestick must close above the red line of LWMA.

There must be the blue line of Trend Envelopes at the signal candlestick. The additional line of the DSS of momentum at the signal candlestick should be green.

This line must be above the signal dotted line that is, it is breaking it through or has already broken. Enter a trade when the signal candlestick closes. I recommend setting a stop loss at a distance of points in four-digit quote.

A take profit is points. The arrow points to the signal candlestick where Trend Envelopes colours change. Note purple ovals that the blue line is below the orange and is moving otherwise the signal should be ignored. At the signal candlestick, the green line of the DSS of momentum is above the dotted line. The price breaks the blue line of Trend Envelopes downside. At the same candlestick, the rising blue line changes into the falling orange line. The candlestick is below LWMA. When the previous condition is met, expect a candlestick to appear below the moving average.

It must close under the red line of LWMA. There must orange line of Trend Envelopes at the signal candlestick. The DSS of momentum additional line should be orange at the signal candlestick. It should be located below the signal dotted line that is, it is breaking through it or has already broken. The below screen displays a candlestick that closed at the level of MA the red line , almost fully below the line.

The below screen shows that the DSS is below its signal line at the signal candlestick. Besides, the blue line is flat, not rising. Signals are relatively rare, you can wait for one signal for a few days. Do not trade when the market is flat. Test this strategy directly in the browser and assess the performance. This is a profitable weekly trading strategy, which can be used for position trading with different currency pairs.

It is based on the springy action of the price — if the price rose quickly, it should fall sooner or later. We can use a chart in any terminal and a timeframe W1 although you can also use a daily timeframe. You should analyze the size of the candlestick body of different currency pairs. There is a wide range of pairs: AUDCAD , AUDJPY , AUDUSD , EURGBP , EURJPY , GBPUSD , CHFJPY , NZDCHF , EURAUD , AUDCHF , CADCHF , EURUSD , EURCAD , GBPCHF. Next, choose the pair with the longest distance between the opening and closing prices within the week.

You will enter a trade on this pair at the beginning of the next week. The bear candlestick, indicating the price action for the previous week, has a relatively big body.

You enter a long trade at the beginning of the next week. You should set a stop loss at a distance of points and a take profit - at points. In the middle of the week, exit the trade. It may be closed with a take profit or a stop loss. Then, again expect the beginning of the week and place a new order. Do not place orders at the end of the week. It is clear from the chart that, following each bearish candlestick, there is always a bullish one although it smaller.

The matter is that what period you should take to compare the relative length of candlesticks. It is individual for each currency pair. Note that some small bear candlesticks were followed by rising candlesticks. The relatively small fall, occurred in the previous week, may continue.

The bullish candlestick, indicating the action during the previous week, has a relatively big body. Red arrows point to the candlesticks that had large bodies relative to the previous bullish candlesticks. All signals were profitable except for the trade that is marked with a blue trade. The disadvantages of the strategy are rare signals, although the percentage of profit is quite high.

And you can launch the strategy trading multiple currency pairs. This strategy has an interesting modification based on similar logic. Investors, day traders, working with a trading volume prefer intraday strategies. They do not have enough money to make a strong influence on the market. So, if there is a strong market action in the weekly chart, this signal the pressure made by big traders.

Differently put, if there are three weekly candlesticks in the same direction, the fourth candlestick should be in this direction too. The psychological factor is also important here.

Those, who have been pushing the market in one direction, should start taking the profit in a month. It is good if the next following candlestick is bigger than the previous one. Doji candlesticks candlesticks without bodies are not taken into account. A stop loss is set at the close level of the first candlestick in the sequence. It can take 2 or 3 months.

LiteFinance Global LLC does not provide brokerage services in your country. org website, you confirm that access to all programs and services is provided to you for informational purposes only, without the offer of registration. Every trading manual or instruction insists that a trading strategy is necessary for successful trading. First of all, when you select your forex strategy you gain greater clarity of the trading process, which helps minimize trading risks.

Profitable Forex strategy is an instruction. A trader faces high risks without using any system or plan. The market is hard to predict, and it often results in trading mistakes.

Your forex strategy will tell you what you should do in various changeable market conditions. Your trading strategy should be suited for any situation. Your trading strategy will prompt you when you need to enter or exit the market. But it mustn't contain any unjustified elements. Trading strategies can be based on various tools. The most popular trading strategies are:. These strategies make up a basis to develop your own forex trading strategy. The suggested setting and recommended levels to put pending orders are nothing more than a recommendation.

If you do not like the backtesting or the performance on a real account, the strategy may not be a fail. You just need to find individual parameters for indicators suitable for a particular asset or a current market situation.

This strategy is quite popular, at least, you can find its description on many trading websites. However, Internet resources suggest different recommendations concerning the Bali trading strategy.

According to the developer, Bali is a scalping forex strategy, or at least, it is designed for short term time frames. It is also good for day trading. It suggests quite short stop losses SL and take profits TP. However, the recommended timeframe is rather long, and so, signals are sent quite rarely. Linear Weighted Moving Average serves here as an additional filter. As the LWMA attaches more importance to the most recent price moves, there are almost no delays in the long-term timeframes.

Occasionally, the LWMA may send an early signal in the long run. But this strategy considers only the MA position relative to the price movements.

If the LWMA is below, it is a buy signal. If the line is above the price, it is a sell signal. The indicator is also based on Moving Average, but it has a different calculation formula.

Its layout is more accurate the price noise is reduced. It allows you to identify the breaks in the trend a little earlier than the ordinary MA. Trend Envelopes has an interesting property. It is a kind of trading signal. The indicator is displayed in a separate window under the chart. This is an oscillator that identities trend pivot points. It does it quicker than standard oscillators. It has two lines: the signal line is dotted, the additional line is solid.

But the receiving line has two types of colours orange and green. Note that the indicators in the Bali trading strategy are selected so that they provide an early signal buy and sell. This gives a trader more time to confirm the market moves and check the fundamental factors. MA is a standard MT4 tool, the rest two indicators can be obtained for free in the archive via this link.

Past the indicators into the folder and restart the platform. The price breaks through the orange line of Trend Envelopes upside. At the same candlestick, the down orange line changed into the rising blue line. The candlestick is above LWMA. When the previous condition is met, expect the candlestick above the MA to appear. The candlestick must close above the red line of LWMA. There must be the blue line of Trend Envelopes at the signal candlestick. The additional line of the DSS of momentum at the signal candlestick should be green.

This line must be above the signal dotted line that is, it is breaking it through or has already broken. Enter a trade when the signal candlestick closes.

I recommend setting a stop loss at a distance of points in four-digit quote. A take profit is points. The arrow points to the signal candlestick where Trend Envelopes colours change. Note purple ovals that the blue line is below the orange and is moving otherwise the signal should be ignored. At the signal candlestick, the green line of the DSS of momentum is above the dotted line.

The price breaks the blue line of Trend Envelopes downside. At the same candlestick, the rising blue line changes into the falling orange line. The candlestick is below LWMA. When the previous condition is met, expect a candlestick to appear below the moving average. It must close under the red line of LWMA. There must orange line of Trend Envelopes at the signal candlestick.

The DSS of momentum additional line should be orange at the signal candlestick. It should be located below the signal dotted line that is, it is breaking through it or has already broken. The below screen displays a candlestick that closed at the level of MA the red line , almost fully below the line. The below screen shows that the DSS is below its signal line at the signal candlestick.

Besides, the blue line is flat, not rising. Signals are relatively rare, you can wait for one signal for a few days.

Do not trade when the market is flat. Test this strategy directly in the browser and assess the performance. This is a profitable weekly trading strategy, which can be used for position trading with different currency pairs.

It is based on the springy action of the price — if the price rose quickly, it should fall sooner or later. We can use a chart in any terminal and a timeframe W1 although you can also use a daily timeframe.

You should analyze the size of the candlestick body of different currency pairs. There is a wide range of pairs: AUDCAD , AUDJPY , AUDUSD , EURGBP , EURJPY , GBPUSD , CHFJPY , NZDCHF , EURAUD , AUDCHF , CADCHF , EURUSD , EURCAD , GBPCHF. Next, choose the pair with the longest distance between the opening and closing prices within the week. You will enter a trade on this pair at the beginning of the next week.

The bear candlestick, indicating the price action for the previous week, has a relatively big body. You enter a long trade at the beginning of the next week. You should set a stop loss at a distance of points and a take profit - at points. In the middle of the week, exit the trade. It may be closed with a take profit or a stop loss. Then, again expect the beginning of the week and place a new order. Do not place orders at the end of the week. It is clear from the chart that, following each bearish candlestick, there is always a bullish one although it smaller.

The matter is that what period you should take to compare the relative length of candlesticks. It is individual for each currency pair. Note that some small bear candlesticks were followed by rising candlesticks. The relatively small fall, occurred in the previous week, may continue.

The bullish candlestick, indicating the action during the previous week, has a relatively big body. Red arrows point to the candlesticks that had large bodies relative to the previous bullish candlesticks. All signals were profitable except for the trade that is marked with a blue trade. The disadvantages of the strategy are rare signals, although the percentage of profit is quite high.

And you can launch the strategy trading multiple currency pairs. This strategy has an interesting modification based on similar logic.

Investors, day traders, working with a trading volume prefer intraday strategies. They do not have enough money to make a strong influence on the market. So, if there is a strong market action in the weekly chart, this signal the pressure made by big traders.

It can also remove those that don't work for you. There are several types of Forex trading strategy styles from short timeframes to long timeframes. It can also help you understand the risks of trading before making the transition to a live account. It shows those entry points with the lowest risk possible so as extreme precision. Fibonacci search is helpful in trading Forex, even for beginners.

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