Best Forex Trading Strategies

The Best Forex trading strategies that work For 2019

Are you struggling to find the best Forex trading strategies available to you as a new trader? If so, then you’re in the right place!

Best Forex Trading Strategies

In today’s article I’m going to cover what are the Best Forex Trading Strategies you can use with your trading. With one of the most common questions I get asked “Forex trading strategies that work?”

The best strategies for you to use with your trading are going to be either: using a position trading style where you will hold trades for weeks at a time. Or my favourite, being a swing trading style of trading using the Daily time frame.

Plus…other strategies such as: day trading and scalping strategies. But read on to find out my pros and cons with all types of trading strategies.

Make sure you read this post to the end, as you don’t want to miss my free Forex swing trading strategy or the Daily price action trading strategy.

Position trading

Lets start it of with a very know type of trading with a longer perspective:

Best Forex trading strategies with position trading

You guessed it! Position trading is a longer term trading approach to the markets. Where you can hold trades for 1-2 weeks or even a few months at a time.

The time frames you’ll trade with position trading are usually going to be the Weekly and Monthly charts.

Which can very well put many traders off, with new traders being taught the idea that they should be trading in the markets every day.

Look:

As a position trader, you will mainly rely on fundamental analysis within your trading.

This would include mostly major news events like NFP, GDP, Retail sales, and interest rates to give you a bias.

As well as fundamental analysis, you may also use technical analysis to better time your entries.

To give you a more technical understanding of position trading, take a quick look at what Wikipedia recommends as position trading in finance.

Here comes the best part:

Lets now look at what the pros and cons are with being a position trader.

The Pros with position trading:
  • You don’t need to spend much time trading because your trades are a longer-term approach.
  • It’s much less stressful in your trading as you’re not concerned with the short-term price fluctuations.
  • It will also be a more favourable risk to reward on your trades being a larger movement (possibly 1 to 5 or more)
The Cons with position trading:
  • It will require a firm understanding of fundamentals that are driving the markets.
  • You would need a larger capital base because your stop loss is much wider on the higher time frames.
  • You may find that you don’t make a profit every year because of the low number of trades you would take.

And lastly…There’s a trading strategy which is referred to as the Trend Following strategy which is similar to position trading.

The only difference is Trend Following is purely a technical approach that doesn’t use any fundamentals. It is also one of my best Forex trading strategies that I use to trade the markets.

With using one of the best Forex trading strategies, it’s important to have a working Forex trading plan. 

If you don’t already have a plan in place, or you’re not sure how to create a plan. Then check out my trading article on how to create a trading plan here.

Is position trading for you?

If not then you will want to check out my favourite type of trading with swing trading.

Swing Trading

Swing trading unlike position trading is more of a medium-term trading strategy. 

Forex Swing Trading Swings in the market

Where you can hold trades for a few days or even weeks. The time frames you’ll trade with swing trading are usually going to be the 4-hour or Daily.

As a swing trader, your main concern is going to be capturing a single move within the market (otherwise called a swing). 

So when swing trading you’ll likely be looking to trade:

  • Buying of Support.
  • Selling of Resistance.
  • Looking to trade breakouts.
  • Looking to trade pullbacks.
  • Some traders will look to trade the bounce of a moving average.

Therefore it’s important to learn technical concepts like Support & Resistance, candlestick patterns, and moving averages.

A great place to start, to learn all of the above is to check out my basics of Forex trading page. Where you will learn everything you need to know if you’re just starting out.

Lets now look at what the pros and cons are with being a swing trader.

The Pros with swing trading:
  • You wouldn’t have to quit your full-time job to be a swing trader.
  • It’s possible to be profitable every year because you have more trading opportunities than with position trading.
The Cons with swing trading:
  • You most likely won’t be able to ride big trends using the swing trading approach.
  • One major con is the fact you would have overnight risk on some open trades.

A swing trading approach is one of my preferred types of methods to trade in the markets.

Because of this, I decided to dedicate a trading lesson all on this topic. With a Forex swing trading strategy which you can check out by clicking HERE!

Day Trading

Look:

Day trading is more of a short-term trading strategy where you’ll hold your trades for several minutes or even hours.

Best Forex trading strategies Day Trading

In a way it’s similar to swing trading but at a much “faster” pace. The time frames you’ll trade on are usually the 5 mins or 15 mins.

Day trading can be like trying to navigate your way through a maze!

As a day trader, your main concern is to just capture the intra-day volatility. Usually this will only involve small moves in the intra-day.

This means you must trade the most volatile session of your instrument because that’s where the money is made.

So when day trading you’ll likely be looking to trade:

  • Buying of Support.
  • Selling of Resistance.
  • Looking to trade breakouts.
  • Looking to trade pullbacks.
  • Trading the bounce of moving averages.

Therefore if you’re a day trader. You won’t be concerned with the fundamentals of the economy or the long-term trend because it’s irrelevant.

Instead, you’ll identify your bias for the day (whether to be long or short) and trade that direction for the session.

Lets now look at what the pros and cons are with being a day trader.

The Pros with day trading:
  • If you’re a well seasoned trader, you can make money on most months.
  • There wouldn’t be any overnight risk because you close your positions by the end of the day.
The Cons with day trading:
  • Day trading can be much more stressful as you’re constantly watching the markets.
  • You can lose a lot more than intended to if you suffer massive slippage.
  • Day trading can be a high opportunity cost as you could be earning a full-time income elsewhere.

Scalping

Scalping in my opinion is the worst type of trading any new trader could start.

scalping

It’s one of the more dangerous types of trading. Which can seriously eat away at your profits with the transaction costs per trade.

Plus you’re going to be much slower than the machines which will put you at a major disadvantage from the get go!

Scalping is a very short-term strategy where you’ll hold trades for just a few minutes or even seconds.

As a scalper, you’re concerned with what the market is doing now and how you can take advantage of it.

The main tool you’ll use to trade is order flow, which will show the volume of buyers to sellers in the market.

Lets now look at what the pros and cons are with being a scalping trader.

The Pros with scalp trading:
  • With scalp trading you are most defiantly going to have lots of trading opportunities each day.
  • If traded correctly, then there is every chance you could make a healthy income from scalp trading.
The Cons with scalp trading:
  • When scalp trading there will always be a much higher financial cost.
  • You would be stuck looking at your PC screen for many hours a day.
  • Most of all the worst con regarding scalp trading is the high level of stress you would endeavour.
My Conclusion

Are you pumped and ready to start trading with your favourite Forex trading strategy?

Look:

Now having covered many trading strategies and each aspect with the pros and cons to each.

You can easily see the best Forex trading strategies to employ would of course be a longer term approach using the 4 hr to the Daily time frames. 

This of course being the swing trading approach, giving you the “trader” an edge within the markets.

Continuing onto my next Forex trading tip you will find out which I consider the “most successful Forex trading strategy.”

Plus by clicking the link below you can take a look at one of the trading strategies using the Daily time frame for trade entries.

This being a price action trading based strategy, using a simple concept of candlesticks with support and resistance. 

So check the Daily strategy out here!

Now you have a good understanding of the different Forex trading strategies you can implement in your trading.

Check out my favourite strategy now with my “Forex Swing Trading Strategy”

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