There are various forex trading strategies, before I talk about the best 1 hour trading strategy, you should that note that in the forex market, no time frame is a waste as they all have their purposes.
Based on your trading style and understanding of the forex market and top-down analysis, you will come to see that every timeframe tells a story of the past and an anticipated direction of where the market will possibly go.
In this article our emphasis will be on the 1 hour timeframe, to effectively make this work will have to also look at the higher timeframes and lower timeframes as well to make properly informed decisions on trade entry.
1 HOUR SWING TRADING STRATEGY
1 hour swing trading strategy cannot be mentioned without the daily timeframe; as swing trading requires holding trades for a long period (days to weeks).
Swing traders buy at major support levels and sell at major resistance using higher timeframes D1 and weekly.
One disadvantage of swing trading is that you don’t find a setup every time however when you find one the reward is high.
One advantage of swing trading is that it filters the noise giving you a clear direction of where the market is going.
I am going to show you a clear image below of how to apply 1 hour swing trading strategy.
BEST 1 HOUR TRADING STRATEGY
To become successful in forex trading, follow the steps below for the best 1 hour trading strategy;
- Find the dominant trend on H4 and D1
- Be patient for retracement to a support level or resistance
- Find a chart pattern or candlestick engulfing pattern of a lower timeframe of 5 or 15 minutes for entry
BEST INDICATOR FOR 1 HOUR CHART
When trading the forex market, it is important to know that before rushing into indicators; you should first do your market analysis on the naked chart; which will give you a clearer perspective on the market over.
Indicators should be a secondary option that supports your naked trading analysis.
Below is the best indicator for 1 hour chart that I use.
BEST MACD SETTINGS FOR 1 HOUR CHART
Before you rush off to get the best MACD settings for 1 hour chart, it is important you know your trading style so you know how to apply it to your trading.
The truth is if you do not have good knowledge of the forex market structure, no MACD setting will be enough.
My experience as a forex trader has taught me to first focus on the principles of trading and I wouldn’t want you to make the wrong decision; that is why I am here.
My dear reader my advice to you is to first stick with the default MACD setting and learn the basics of trading, this is what you need.
RELATED: TRADING 1 HOUR TIME FRAME FOREX
BEST 4HR FOREX STRATEGY
There are many ways to trade the 4hr time frame, but the best 4hr forex strategy is first knowing the dominant trend and being patient for a retracement (a market structure is inevitable) to resistance or support then joining in the trend continuation.
The idea of support and resistance in the forex market cannot be overlooked; it is an essential part of forex trading.
After this is done you can add a supporting indicator to your trading charts like the moving average and MACD; but first, pay attention to the principles of forex trading.
1 HOUR SCALPING STRATEGY
Let’s look at the efficiency of the forex scalping method before moving on to the proper buying and selling of the pair. The FX market is a decentralized network in which trades are conducted through a centrally located electronic system.
As a result, uncertainties make price forecasting difficult, and inaccuracies in trading decisions are common. Major Banks and financial institutions can have a considerable influence on the market.
As a result, even if you evaluate the market, it may not work unless it corresponds to the institution’s predicted direction.
This is where the 1 hour scalping strategy comes into play.
In forex trading, scalping can come in handy. You don’t have to worry about what’s going on in the market when you’re a scalper.
Scalping tries to profit from short-term price changes, so if there is uncertainty, you can exit the market with a minor loss and return later to look for another opportunity.
Another advantage of scalping is the outcome. You won’t have to wait hours or even days to see the results of your transaction. Scalping trades, in most circumstances, achieve profit levels within minutes or hours.
These are the indicators you need for scalping:
Relative Strength Index- default
Exponential Moving Average- 100
Exponential Moving Average- 50
We can see a trade setup when the price is above these MA lines. Similarly, if the charge moves below those lines and stabilizes, we can switch our viewpoint from bullish to bearish.
We can forget about what is going on in the higher timeframe in each circumstance.
Keep in mind that a rising moving average crossover indicates momentum in the trend. If the fifty EMA crosses above the hundred EMA, we go long.
Similarly, if the 50 EMA goes below the hundred EMA, it indicates a sell.
TRADE SETUP
The trade setup comes when the EMA 50 moves above the EMA 100 with a bullish candle close above both Moving averages. At that time, the RSI should be above the 30 level, pointing higher.
The same rules apply as for a sell trade, with the exception that the entry will be allowed only after a bearish crossover with RSI support.
STOP LOSS
The trade is good until the price moves beyond the 50-day exponential moving average (EMA). In buying and selling trades, the stop loss should be above or below the 50 EMA.
TAKE PROFIT
The primary take profit is based on a risk-to-reward ratio of 1:2. You can choose to close the trade or hold depending on the market conditions of that pair at the time.