Tag: forex trading strategy

  • Best Trading Strategy Without Indicators In Forex

    Best Trading Strategy Without Indicators In Forex

    Best Trading Strategy Without Indicators In Forex
    This trading strategy means you’re trading without indicators. It is also called a naked forex trading or price action trading.

    By Guy Avtalyon

    Let’s say you’re a beginner in Forex trading and still don’t understand indicators quite well so you would like to know what is the best trading strategy without indicators. One of the best ways is to trade using a price action trading strategy. Actually, I’m gonna suggest you some.

    Forex trading is complicated for some people because so many technical indicators are involved in trading. One of the simplest forex trading strategies is the forex portfolio price action. If you use this really the best trading strategy without indicators. And you’ll see, you’ll find some of the trades by using this strategy. 

    What is price action trading?

    Price action trading is the best trading strategy without indicators and I’ll show you how simple and favorable it is. The point is to find out how the price will behave when you test it in support and resistance zones. This strategy will help you to identify where the price movements form a swing high or swing low. The simplicity lies in the fact that you don’t need moving averages or some lagging indicator to identify it. These indicators can be confusing but with a price action trading strategy, you’ll have a clear chart. Why am I so sure this is the best trading strategy without indicators? Because thanks to it many forex traders are very profitable. No indicators are involved, you don’t need to know them, no need to understand them or recognize. 

    So, let’s be more concrete. Here is how to use price action strategy.

    The best trading strategy without indicators

    As I said no indicators involved but we’ll discuss how they can be dangerous if you use them in the price action strategy.

    Now, you have to pay attention to price action setups. If you notice that there is no price action, it is a so-called dead zone. Who would like to trade there? Literally no one. The dead zone is as the name indicates, exactly that – dead. Nothing happens there. The price doesn’t make any move. The sellers and buyers are like on the teeter. The dead zone is a standby zone, nothing happens and everyone is expecting what is going to happen. No one wants to trade because it is impossible to enter or exit the trade in the dead zone and win. The reason is simple, no one wants to do anything. So, never enter the trade in a dead zone.

    Forex trading is a game of nerves

    So when there is no price action you’ll have to wait until something starts to happen. 

    The other price action setup is the red zone. That is where all price actions are happening. That is exactly the point where you’ll have to make almost all your trading decisions. This is a zone with a lot of price movements. You have to be focused on such an occasion. Even with a move of 20 pips only, you’ll have a winning trade. With 100 pips you can potentially make a lot of money.

    Your next goal is to reach the end zone. As I said, the red zone is where the price actions happen, but you’ll have to move closer to the end zone if you want to maximize your profits. Only then the price action strategy will give you its best. So how to find this zone? Simple! When the market is 10 to 20 pips wide that means there is enough space for changes and adjustments. This spread of 10 pips is exactly what you need for the best trading strategy without indicators. The price action strategy needs changes to provide you a successful result and exit in profit.

    Price action strategy without indicators in Forex

    All you have are support and resistance and volume. Volume isn’t an indicator because it is a statistic. 

    So, this strategy is only about two things. First, you have to identify what is the price action in support or resistance zones. If you notice the market comes into high resistance, the traders now can do several things. The first is that they could do nothing because the price enters the resistance level. Second, traders could start to sell. If they didn’t have an open position, they could start to sell short. Also, traders could buy. 

    But what we need here is to see a large volume on a breakout. We need a lot of buyers to move the price to break the resistance. So, what we really need is a lot of buyers, a lot of orders, a lot of trades. 

    But pay attention! This can be a tricky part. What if a new resistance occurs? It is possible to happen and here is what you’ll need to do if you want to profit. If you notice a new resistance it is likely an exhaustion pattern. As I mentioned it is not the right time to buy. You’ll need more space between the point you entered the trade and the point where you exit. Some traders would trade the new breakout. But it is the wrong decision. You should wait until the price breaks the new resistance, just be patient. But what if the price does not break out above it?

    You’ll have to wait until resistance becomes a support to buy low and sell high.

    Drawbacks with forex trading without indicators

    The price action strategy is also called a naked forex trading. The main problem here is that you’ll need a lot of developed skills to use this strategy. This means you’ll have to understand market psychology,  why the market moves, and you’ll need to recognize how the market moves, and how it will move. Also, sometimes you’ll need to rely on intuition and it isn’t the best way. At least, it isn’t a safe way. But it can be a very profitable strategy once you develop your skills. Maybe you should start with a demo account, that is something I always recommend to beginners.

    Anyway, you should look at price action first and then at indicators. If you need, use the indicators to confirm the decision to make the trade. This strategy will save you time, you have only two factors to estimate. Your trades will be less stressful and simpler. The final consequence is that you’ll be able to trade more precisely. In any case, never just jump into the trade, you’ll need to know when to enter and when to exit your trades. Don’t do anything before you determine these points.

  • Forex Strategy That Works For You

    Forex Strategy That Works For You

    Forex Strategy That Works For You
    Having discipline is a key feature of forex trading. How can you have discipline when you are in a trade? One way is to have a trading strategy that works for you. The key part is the profit. 

    By Guy Avtalyon

    It will require some time to find a forex strategy that works for you especially. Every forex trader has a unique style, risk tolerance, amount of money available, and trading goals. So, your forex trading strategy that works for you not necessarily will work for other traders. But some forex trading strategies can be suitable for everyone. 

    First of all, let’s explain what a forex trading strategy is.

    What is a forex trading strategy?

    It is a technique that a forex trader uses to discover when to buy or sell a currency pair. There are numerous forex strategies that traders can practice. For example, technical analysis and fundamental analysis. A forex trading strategy that works should provide you to analyze the market and execute trades with clear risk management systems.

    A Forex strategy that works

    Forex strategies are divided into several organizational structures which is a great help to traders to find a forex trading strategy that works for each trader the best. The main point is to locate the most suitable strategy. 

    So, we can divide forex trading strategies into main categories: Price action trading that includes Trend trading, Scalp trading, Position trading, Range trading, Day trading, Swing Trading, and Carry trading.

    Forex trading demands to put together various factors to form a particular forex trading strategy that works for you. There are innumerable strategies that traders can use. What really matters is to understand and feel comfy with the strategy you create and use. Each forex trader has individual intentions and sources. That fact must be taken into factor when you want to pick or create a forex strategy that works for you particularly. 

    You can use three criteria to analyze distinct strategies based on their convenience. To find a forex strategy that works you have to determine what time resource is required. Further, what are the frequency of trading chances? And last but not the least, what is the ideal distance to a target.

    To compare the forex strategies based on these three criteria, you have to know how efficient they are based on other traders’ experiences. It is always smart to check how a particular forex strategy works for others. 

    How to find a forex strategy that works?

    The crucial is the risk-reward ratio. So, based on historical data and traders’ experience position trading will provide you the highest risk-reward ratio. 

    Further, you have to examine how much time you’ll need to invest to monitor your trades. For example, scalp trading is a high-frequency strategy so it will require most of your time.

    In order to help you to find a forex strategy that works for you, we’ll explain how each of them works.

    What is price action trading?

    Price action trading means studying historical prices to create technical trading strategies. The advantage of this strategy is that you can use it as a stand-alone. However, you can use it in combination with an indicator. Fundamentals are rarely applied, but sometimes it is smart to include economic circumstances as a supporting part.

    The price action strategy actually covers several other strategies. 

    For example, the length of trade. The strategy gives you an opportunity to use multiple time frames in trading. It is suitable for long, medium, and short-term tradings. 

    What is most important with this strategy and the most convenient you can use it without any indicators, complex techniques. It can be used based on simple price action.

    Few more words about price action strategy

    All price action in forex trading comes from buyers (that are bulls) and sellers (that are bears). When the GBP/USD currency pair goes up it’s due to more bulls than bears. Of course, when this pair is going down it is vice versa. So, you may conclude, and you’ll be right, that we have a permanent fight between bulls and bears in the forex market.

    This forex trading strategy is all about examining who controls price, bulls, or bears and who’ll control the price. 

    When bulls are in control and you have proof they will continue that, it is the right time to go long, meaning you can buy. The opposite is when the bears are in control of price. That means it’s time to short, meaning you can sell.

    But how to examine who is in control?

    This forex strategy that works always is quite simple to use. The essential is to use just two price action methods or techniques.

    One is support and resistance zones. The buy and sell zones are easy to identify and add them to your charts. When the price hits these zones there are two possible directions: the price will halt or reverse. So you’ll know that is the right time to buy or sell.

    The price action forex strategy that works in all conditions

    It doesn’t matter if it is trending, low volatility, high volatility forex market, this strategy will work anyway, and generate profit. It is different from strategies based on indicators that are suitable for particular market conditions. For example, if you use an indicator strategy that is good for the high volatility market, it will slip in other market conditions. It is due to indicators’ inability to adjust for different market conditions. One indicator is good for one market condition. 

    Price action is what can be adjusted to the time frames, different currency pairs, market conditions, and moreover, and to many traders though. The point of this forex trading strategy is that it literally works for everyone because it keeps the trading simple.

    What is the purpose of price action strategy 

    The best forex strategies use price action. As we mentioned above it is also known as technical analysis. Speaking about technical currency trading strategies, we can recognize two main techniques: follow the trend and counter-trend trading. Both are aimed to profit by identifying and utilizing price patterns.

    To profit from price patterns, the most powerful approach is to identify support and resistance. In other words, both show the market tends to bounce back from prior lows and highs. Support means the market tends to increase from an earlier confirmed low. Resistance is the market that tends to fall from an earlier confirmed high. This happens because traders want to predict the next prices against current highs and lows.

    What happens when the market approaches recent lows? 

    It is obvious that buyers will seek what they see as cheap and buy. On the other hand, when the market nears the recent highs, the sellers will lock in a profit since it is a great opportunity to sell at expensive prices. So, recent highs and lows are measures to evaluate the current price. 

    Also, support and resistance levels. Both happen because traders predict specific price action at these points and play according to their expectations. This has a great impact on the market because their actions can cause the market to go in their direction.

    But keep in mind some rules. 

    First, support and resistance levels aren’t fixed rules. They are a consequence of the action of traders.
    When traders follow the trend they actually want to profit from support and resistance break-downs.
    Counter-trending is the opposite of trend following. The traders that use this technique will sell when a new high is touched, and buy when a new low is reached.

    The main goal in forex trading is the same as it is in any other trading: eliminate the losses and have more winning trades. You can have it if you use the forex trading strategy that works. It is essential to find the one that suits you the best. That means you have to develop a set of rules and follow them if they work. If not, simply change them. However, the best practice is to follow some proven strategy. Especially if you are planning to enter forex trading and you don’t have enough knowledge and experience. Relying on strategies that are not proven and tested might lead you to enormous losses and failures. So, the best chance for you is to find the right forex trading strategy that works and use it.

    Stay tuned, we will write more about forex trading and powerful forex trading strategies and techniques.

  • How Much Money You Can Make In Forex Trading?

    How Much Money You Can Make In Forex Trading?

    3 min read

    How Much Money You Can Make In Forex Trading?

    Are you tired of being scammed, fake script?

    Do you wanna earn?

    But you want secret strategy 100% working, real and very legit.
    Yeah!

    How much money you can make?

    Can you become a millionaire through Forex trading?

    Well, the answer is YES and NO.

    I am not saying that it is impossible to make millions with Forex. It is.

    But if you want to turn a $500 or even a $5000 account into millions, then I have to tell you that you will have a hard task.

    Yes, I know. You’ve heard of traders making millions in the financial markets.

    But it is not good to compare yourself with them.

    Why is that?

    Because you’ve got different account size, risk affinity, risk management, trading strategy, and etc.

    So is it possible to get rich trading forex? Absolutely!

    How Much Money You Can Make In Forex Trading? 1
    But you need to keep some things in mind before you try it. Many people want to get rich trading forex and there is no doubt it offers the potential to do so but most fail. Forex trading is risky we know that already but with risk goes reward. If I want to explain how much money can you make from forex trading I have to do it with objective measures.

    Just statistics, numbers, and the cold hard truth.

    Are you ready?

    In your trading the most important thing is metric. If you only win 20% of the time and you can have a 1 to 2 risk to reward on your trades, you will be a consistent loser.

    It is obviously your risk to reward isn’t the answer. What else can be? Your win rate maybe?

    Let’s see.  

    You have a 90% win rate but if you lose $0.95 for every dollar you risk, you will also be a constant loser.

    So, where is the catch?

    Your risk to reward and win rate is meaningless on its own. You must combine both your win rate and risk to reward to establish your profitability in the long run.

    This is known as your expectancy. That will give you an expected return on every dollar you risk.

    Mathematically it can be expressed as:

    E= [1+ (W/L)] x P – 1
    NOTE:
    W means the size of your average wins
    L means the size of your average loss
    P means winning rate

    You have made 10 trades, 6 were winning and 4 were losing trades. That leads you to your percentage win ratio is 6/10 or 60%.

    If your six trades brought you a profit of $6,000, then your average win is $6,000/6 = $1,000. If your losses were $3,200, then your average loss is $3,200/4 = $600.

    Apply these to the expectancy formula:

    E= [1+ (1 000/800)] x 0.6 – 1 = 0.35 or 35%.

    This means, the expectancy of your trading strategy is 35% and your trading strategy will return 35 cents for every dollar traded over the long term.

    On the other hand, most of the casinos work 24 hours a day, 365 days a year. 

    The reason is the more they play, the more they make. And it’s the same for trading. You must PLAY more to WIN more.

    The frequency of your trades matter.

    However, the more trades you put on, the more money you will make (while having a positive expectancy).

    Let’s see how important this is.

    You have a forex trading strategy that wins 70% of the time, with an average of 1 to 3 risk to reward.

    But it only has 2 trading signals a year.

    How much money can you make from this forex trading strategy?

    Not a lot, am I right?

    Well, you might even lose in that year since there’s a 9% chance of losing two trades in a row.

    As you can see the frequency of your trades is important but it’s not enough to determine how much money you can make in forex trading.

    There are a few more factors that play a crucial role.

    Differences Between Demo And Real Account In Forex Trading 2I’m sure you heard a lot of stories where a trader took a small account and trade it into millions within a short time. But you have to know that for every trader that attempts it, thousands of other traders blast their account.

    Let’s not treat trading as get – a – rich – quick – scheme. Treat it as a business you’re looking to grow it constantly over time.

    Let’s say that can result in 20% a year (on average).

    If your account is a $1000 you’re looking at an average of $200 per year.

    Your account is a $1m, you’re looking at an average of $200,000 per year.

    Or your account is a $10m, you’re looking at an average of $2,000,000 per year.

    Let’s say it is the same strategy, same risk management, and same the trader. The capital of your trading account is the only difference.

    No matter what strategy or system you’re using, the bottom line is you need money to make money in this business. Period!

    Because your bet size determines how much you can make.

    How?

    The bigger you risk, the higher your returns.

    Let’s say your trading strategy has a positive expectancy and trigger a return of 20R per year. And you have a $100,000 trading account.

    How much can you make from your trading?

    This depends on how much you’re risking per trade.

    If you risk $1000, you can make an average of $20,000 per year.
    Or if you risk $3000, you can make an average of $60,000 per year.
    And if you risk $5000, you can make an average of $100,000 per year.

    This is the same strategy, same account size, and same the trader.

    The only difference is your bet size (or risk per trade).

    But…

    If your bet size is too large, the risk of screw up becomes a real possibility. That is to say, you have a higher risk of detonating your trading account and it will reduce your expected value.

    So, how much money can you make from Forex Trading?

    However, it depends do you withdraw or compound your returns.

    If you make an average of 20% a year with a $10,000 account, after 20 years you will have $383,376.00.

    But if you withdraw 50% of your profits each year you will make an average of 10% a year and after 20 years you will have $67,275.00 on your account.

    So, It is clear enough that compounding your returns will generate the highest return.

    But is it workable or not depends on how you manage your trading business.

    OK, you’ve learned the main factors that define how much money can you make from forex trading.

    Now, let’s see how to use this knowledge and figure your potential earnings.

    Example:

    Trading expectancy – 0.2 (or 20%)
    Trading frequency – 200 trades per year
    Account size – $10,000
    Bet size – $100
    Withdrawal – None

    Now implement this formula: Trading expectancy * Trade frequency * Bet size.

    And you will get:

    0.2 * $100 * $200 = $4000

    You see?

    To sum up, you can expect to make an average of 40% a year.

    And the answer is, there’s no one factor that determines how much money you can make in forex trading.

    You must look at these 5 and monitor and assess the success or failure of various  processes
    1. Trading expectancy
    2. Trading frequency
    3. Account size
    4. Bet size
    5. Withdrawals

    Then implement formula: Trading expectancy * Trade frequency * Bet size.

    In this way, you will have an objective measure of how much money you can make in forex trading.

    Read this too: Best Forex Brokers UK FCA Regulated

    Risk Disclosure (read carefully!)