As a beginner in the forex, you can be overwhelmed with the abundance of information on the internet but am here to make things easy for you. We have to first destroy the preconceived ideas you have about forex trading.
First, there is no such thing as the best forex trading strategy for beginners.
Second, there is no such thing as the most accurate forex strategy.
It is strongly advised that as a beginner in the forex market, you lower your expectation; this is one of the first rules.
One thing though that every beginner trader should have is an understanding of the market structure; in this, you will develop your own profitable strategy.
For the sake of this article, I will show you the one strategy I use for trading and it is good for a beginner as well.
SIMPLE PROFITABLE FOREX TRADING STRATEGY
When you search through the internet for a simple profitable forex strategy, you will find many methods of trading in their numbers and they all promise to be simple until you start losing money. I have been there.
The truth is all forex strategy still falls under the category of a good market structure, if you want to be a profitable forex trader, you cannot be consistent without understanding market structure.
Don’t be quick to grab a bunch of moving averages alone without the knowledge of market structure basic.
Sorry if you did not find a bunch of MA and scalping strategies, I wouldn’t want to lead you down that path, unlike many websites, I want you to pause awhile and think of what am saying. It is time to do something differently.
Note that moving averages are not a bad forex trading strategy but should be an add-on after you know the principles of the forex market for example finding the dominant trend in a market.
In the article below you will find other simple profitable forex trading strategies I gave.
BEST FOREX TRADING STRATEGY FOR BEGINNERS
The best forex trading strategy for beginners to easily understand is chart pattern trading. There are other methods of trading, but this has been the most profitable for me.
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FOREX TRADING TIPS SECRETS
The forex trading tips secrets you are about to know are actually not hidden secrets, if they were, you wouldn’t have access to them easily; that’s why it is called a secret.
The so-called secrets are out there in the public domain and you might have heard some of them before.
- There really is no forex secret
- To have a working trading strategy, you must understand market structure
- Learn to Identify the market dominant Trend
- There are no best trading strategies (the holy grail)
- Emotions are always involved
- Patients is key
- Money management is vital
- There will always be winning and losing trades
- You don’t have to be a financial guru to be a successful trader
- Set realistic goals
- Market structure is key not lagging fancy indicators
- Don’t focus too much on winning rather focus on not losing.
There really is no forex secret:
There is really no Holy Grail in the forex market, every forex trader will have to figure out what works best for them whether it be Day trading, intra-day trading, or scalping. One thing is sure at the end of the day whatever consistently works for you become your secret.
Finally for you to have this developed so-called secret you must know market structure principles.
To have a working trading strategy, you must understand the market structure:
When we talk about having a working strategy it was have been tested putting into consideration market structure. This working strategy is beyond moving averages and stochastic etc.
The working strategy is an awareness of the market behavior of that currency pair, identifying the dominant trend, and locating a support or resistance area to place a trade.
Learn to Identify the market-dominant Trend:
This is one open secret many beginner traders miss, if you can identify the market-dominant trend early enough and find a pullback and probably find a chart pattern breakout on a lower timeframe (H1) and maybe a Fibonacci tool for retracement zone, then you will be making many good trades.
There are no best trading strategies (the holy grail):
When I started trading I was adamantly looking for the best trading strategies all over the internet, after years of searching, I got to ask myself, why are there too many best trading strategies, by that time I had wasted time on a goose chase.
Dear trader, I cannot guarantee the best trading strategy but one I can guarantee you is learning to trade the forex market using forex market structure because this is how the market moves, it responds to structures.
Emotions are always involved:
I laugh at this because I remember trading a demo account; when I went live, the difference was clear. You see in a live trading account emotions are always involved. Every dollar lost or gained matters to you. This is why you apply things like money management when trading and setting your take profit and stop loss.
Patience is key:
I read an article one time when someone said that in the forex market impatient traders give money to patient traders.
You see in the forex market patient is key. After doing a proper market analysis you have to be patient for the market to happen not forcing it.
For example, a day trader will stay much longer in the market than an Intra-day trader.
Money management is vital:
This is based on your trading strategy, it is important you apply money management in your trading, how much are you willing to lose per trade. This will ensure discipline and help eliminate greed in your trading.
There will always be winning and losing trades:
A good and experienced trader will know that there will always be winning and losing trades. This has nothing to do with your trading strategy; even the most skillful trades still make a few losses where they make wrong market analysis but in all your profits will outweigh your losses by far.
You don’t have to be a financial guru to be a successful trader:
This is going to be a quick one, becoming a successful forex trader has nothing to do with being a financial expert or a mathematician. It has nothing to do with being a computer guru.
All you need is the willingness and tenacity to be patient and learn.
Set realistic goals:
Setting realistic goals as a trader is very important; it helps you to lower your expectations and put things in the right perspective.
For example, you have $100 you can set an unrealistic goal of making $1000 in thirty days, yes it is possible for that to happen but that is not a good way to go as you can end up losing all the money in your trading account; what can be done instead is asking yourself how much percentage can be made in a month applying money management.
This is a better way to set a realistic trading goal.
Market structure is key not lagging fancy indicators:
I do not know If you have heard this before; the market structure is key in trading; indicators follow the market structure, not the other way around.
This is why as a beginner the first thing you need is market structure understanding not a bunch of fancy indicators.
You can decide to add one or two indicators later but first, learn naked trading.
Don’t focus too much on winning rather focus on not losing:
One thing I heard in forex was trading is risking and you can lose your investment; I didn’t listen I jump right in until I lost all my money.
I lost all my money a couple of times when I realized that protecting my trading capital is as important as adding to it.
I was too focused on winning that I forgot about losing.
When trading forex doesn’t only focus on winning, focus on not losing too.
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5 EFFECTIVE FOREX TRADING STRATEGIES
These 5 effective forex trading strategies are important because they are used by many traders and are inevitable when trading.
- Support and resistance trading strategy
- Chart pattern trading strategy
- Trend line trading strategy
- Fibonacci trading strategy
- Candlestick pattern trading
Support and resistance trading strategy:
One of the first things you learn as a forex trader is identifying support and resistance zone. It is important in trading and cannot be overlooked.
Regardless of the assets they trade, all Forex traders must understand how to find the level of support and resistance on the chart. Support and resistance, as their names suggest, act as barriers within the forex market, preventing prices from fluctuating, and are therefore easy to spot on price charts.
They are visible on all forex charts and timeframes. One of the most effective ways to better predict future price fluctuations is to trade Forex using support and resistance levels.
The areas of support and resistance can not only reveal traders’ overall market sentiment but also highlight where they do not trade. As a result, support and resistance create a map of the price chart, indicating where the price has previously reversed or bounced.
Predicting future price movements is a powerful tool that can be mastered through the simple analysis of any Forex chart.
Chart pattern trading Strategy:
Chart pattern trading strategy is basically looking out for chart pattern formations and breakouts for market entry.
Chart patterns appear on the forex chart all the time however if a trader is not conscious of this pattern he/she will keep missing them.
One chart pattern with a high occurrence is the bullish or bearish flag.
There are other patterns that can be formed like the symmetrical triangle and pennant pattern etc.
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Trendline trading strategy:
This popular trading strategy is based on the fact that price historically moves in a trend, and the idea behind it is to pick a top or a bottom. A typical trend trading strategy entails identifying pairs that are trending up or down so that the trader knows which direction to look for trades.
The next step is to look for trade entries by using a candle engulfing pattern or a bullish candle and a confirmation bullish candle indicating that the trend is strongly bullish.
Prepare for a price reversal, Setting a stop and limit with support and resistance is the strategy’s exit plan. Learning the trend trading strategy is essential for all traders because it has the potential to be one of the most financially rewarding of all strategies.
Fibonacci trading strategy:
The Fibonacci sequence, named after the famous Italian mathematician, is one of the most well-known and popular Forex trading strategies.
It is a medium to a long-term trading strategy that uses repeating support and resistance levels. As we have seen, historically, markets move in trends, and the Fibonacci tool works best when the market is trending.
When the market is trending up, go long (buy) on a retracement at a Fibonacci support level; when the market is trending down, go short (sell). If the price moves in Fibonacci patterns, traders will notice that it is supported by key 0.328 0.5 or 0.618 levels are usually where they can take their trades while waiting for a reversal.
While many traders use the Fibonacci trading strategy, it should be noted that mastering this technique can take some time.
Candlestick pattern trading:
Candlestick pattern trading is used by many traders unlike bar charts and line charts Candlestick pattern can be very useful, especially for technical analysis traders.
Candlestick for many traders is easy to interpret. It can tell what traders are doing in real-time.
And it is used by many scalpers who trade on lower timeframes.
BEST WAY TO TRADE FOREX PROFITABLY
I can begin to list rules on the best way to trade forex profitably; an am pretty sure you have heard them before, from creating a trading journal to avoiding the use of high leverage, not investing more than 5% of each trade position.
All these rules are good however if you do not understand market structure the above rules wouldn’t do much for you.
It might keep you safe but for her long.
That being said the best way to trade forex profitably is by learning market structure.
BEST FOREX STRATEGY FOR CONSISTENT PROFITS
There are no best forex strategies for consistent profits because the market appears different every time based on traders’ sentiment and global events so one strategy cannot be the Holy Grail.
One thing that doesn’t change is the principles/ psychology of the forex which is also market structure, in it, you will find support and resistance, order block, chart patterns, etc.
When you understand these ideas you can develop a strategy that works for you.
SIMPLE FOREX TRADING STRATEGIES
A simple forex trading strategy am going to show you is the trend continuation and retracement
In this strategy, you need only one Moving average which is set to
M A period -21
MA method –Exponential
How it works:
- Use D1 to identify the dominant trend
- Wait for a retracement to a resistance or support level On D1 or H4 (using line chart to find most recent support and resistance)
- Join the market continuation using H1 after multiple rejection on H1 and a candlestick close above MA 21 on H1
Here is a screenshot below:
MOST ACCURATE FOREX STRATEGY
There is no such thing as the most accurate forex strategy as forex strategy is developed when a trader becomes consistently profitable with a trading strategy.
In my tears of trading, the most accurate forex strategy that stood out for me is chart pattern trading.
They are very reliable and these patterns are easy to spot on the chart.
WHAT IS THE EASIEST TRADING STRATEGY FOR BEGINNERS?
The easiest trading strategy for beginners will be to focus on the London session and trade the breakouts putting into consideration the dominant trend and trading the breakout with the direction of the trend.
IS THERE A 100% WINNING STRATEGY IN FOREX?
No there are no 100% winning strategies in forex, even the most skillful traders still have losing trades.