When traders are getting tired of complicated strategies, maybe some of them are trying to find a simple forex trading strategy that works.
This is not without reason, after trying to find a profitable strategy, but all effort resulted in a failure, then eventually get minds to think more simply, by learning a simple forex trading strategy.
Yup, forex trading is a business that has its own uniqueness, there are various strategies in an effort to get profit because forex is a risky business challenge. Some use complicated software and cause the chart to contain many indicator lines. And some just use blank charts without indicators.
Maybe you are wondering whether this simple trading strategy is easy and profitable, this review might open your eyes that simple is not always bad.
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Simple forex trading strategy at a glance
A simple forex trading strategy is a way of trading that is easy to understand, easy to carry out trading rules, and does not require a lot of toolbox or indicators.
In general, this simple forex trading strategy is easy even for beginners. But because in this simple forex trading strategy there are several methods. Maybe not all methods are easy for beginners.
Therefore, we try to classify the simple forex trading strategy for beginners, this aims to make it easier for beginners to find one that suits their traditional style.
Is a simple forex trading strategy works?
Yes, the simple forex trading strategy really works, but this also really depends on the experience of the trader in learning it.
Why can experience provide better teaching? This is because if a trader has a long experience, he will find something unique from price behavior.
This will make it easier to evaluate any mistake and improve the way the strategy. So that it is more effective in determining entry points and exit points with a high probability of ending in profit.
Simple analogy, when we learn to ride a bicycle. At the beginning of the exercise, it will be difficult to maintain a balance between the body and the speed of the bike. But with long experience in practice, finding balance is not difficult, and we can ride a bicycle with ease.
Simple forex trading strategy for beginner
Beginners are traders who do not have long experience in forex trading. They are still in the learning stage after finding information about forex opportunities as a source of income.
Beginners also call it a novice trader. The following are some simple forex trading strategies for beginners. It is recommended to practice only with a demo account.
Moving average crossover
For those of you experienced traders, I am sure you are familiar with a simple strategy with MA crossover. But for beginners, this may be very meaningful for you to learn it and put it into practice.
To practice, this MA crossover strategy traders only need two Moving average indicators. The two moving average indicators can be SMA (Simple Moving Average) or EMA (Exponential Moving Average). But based on practice, more traders are choosing SMA for this simple MA crossover forex trading strategy.
The most common settings with the MA crossover strategy are SMA 20, and SMA 5.
SMA 20 takes candlestick data 20 candles backward. If plotted on a daily timeframe, it means retrieving data for the past 20 days. That’s for long-term analysis.
SMA 5 takes candlestick data 5 candles backward, on this daily timeframe it takes data from 5 days ago.
How to trade
Because the 20 SMA is picking up more candlestick data, the indicator line’s response to the price tends to be slow. While SMA 5 takes shorter candlestick data, the indicator line response is more responsive due to price changes.
The way of trading is very simple, traders just need to wait for the SMA 5 to cross the SMA 20.
If the 5 SMA crosses the 20 SMA, from top to bottom, it is a sell signal for traders. If it crosses from bottom to top, it means a Buy signal.
How to Exit trading
Exit trading is the determinant of profit and loss, traders need to learn how to exit with the possibility of a bigger profit target winning. The simplest way to exit is to set a target profit/loss for example 20 pips from the price order.
This assumption is based on the average price movement that can be achieved, the character of the pair needs to be considered because some pairs may have higher and wilder average prices.
Another way that is worth trying is to count the candles from the order price, for example, the position will be closed if it has formed three candles, with the final result being a profit or loss, but this method requires focusing on the market because it cuts loss/profit manually.
Bolinger band simple forex trading
Another easy toolbox for beginners is the Bollinger band indicator. In general, this indicator is used to measure price volatility. If the volatility is high the indicator will expand, but if the volatility is low the indicator will narrow.
Although this indicator can be used at an advanced level in more complex strategies, beginners can apply simple rules.
A standard-setting period of 20 with a standard deviation of 2, is the default setting of Bollinger bands and can be applied to all timeframes. For short-term trading the M15 timeframe more traders use.
How to trade
How to trade with Bollinger bands can be done by waiting for the BB line to squeeze the price. Often after BB indicates low volatility, there will be price momentum there will be an increase in high volatility.
When the BB line squeezes, watch the candle’s behavior, if the price closes above the upper band, it becomes a Buy signal, otherwise, if the price closes below the lower band, it is a Sell signal.
There are other ways to trade with BB, for example looking at the behavior of the candle towards the middle band, if the candle crosses the middle band from the bottom up it is a buy signal. Conversely, if the candle crosses the middle band from top to bottom it is a sell signal.
However, this method often gives false signals because when the price is sideways, it will be easy to go back and forth in the range across the middle band.
How to exit trading
How to exit trading with this strategy traders can choose to use a trailing stop, or wait for the possibility that volatility has started to decline. This is by paying attention to the BB line of candle pattern to recognize it early.
To make it simpler to determine exit points, traders can directly place profit targets and stop losses, say 20 pips, using a 1:1 risk-reward ratio.
Simple Breakout trading strategy
The breakout strategy can be done with a variety of trading methods. However, in implementing a simple breakout for beginners, you can take advantage of a simple method.
In a simple breakout strategy by utilizing support and resistance lines as the basis for breakout signals.
To start with, the first is how to find support and resistance zones. There are various ways to find support and resistance, but we use the simplest method. Use a rectangle to draw a sideways market area.
How to draw the box
If using the Tradingview platform we can draw the box using a parallel channel, then we look for candlestick patterns that show prices in a market range or sideways. We draw a parallel channel box by dragging from the top and bottom prices.
If using the MT4 platform, you can use a rectangle which can be found through the Insert menu – >> Shapes – >> Rectangle.
How to trade
How to trade using this breakout strategy is very easy, just wait for the price to break above or below the box. Traders can place pending buy stop and sell stop orders above and below the line.
This strategy is not completely successful, because the dynamics of the price may be after a breakout it is only temporary and the price returns to the box range. Therefore placing a stop loss is a way to manage the risk of a false breakout.
Breakout Exit trading
The best way to exit trading on a breakout strategy is to pay attention to how strong the breakout is. However, this method requires advanced skills to recognize candlestick patterns to signal a weakening trend. So the simplest way is to set a profit target, with a risk-reward ratio.
Simple forex trading strategy how to catch 100 pips a day
Maybe this strategy is very simple and many are looking for it. Between belief and no, but I found the concept on the Babypips forum.
It may seem unbelievable, but you can try this simple strategy. The only toolbox needed is the EMA and RSI. Is this interesting? Continue.
Indicator set up
As mentioned earlier, this requires the EMA and RSI indicators, which use two EMAs with EMA 5 and EMA 10 settings. RSI 10 applies to the median price (HL/2), adding a level 50 parameter.
The recommended timeframe is H1, and it is necessary to enlarge the image by Zooming in for a more detailed view of indicator lines and candlesticks.
The recommended pair is to avoid cross pairs, it can be EUR/USD, USD/JPY, or whatever pair is.
To distinguish the EMA 5 and EMA 10 lines, you can choose different colors, such as the example above, EMA 5 is yellow and EMA 10 is magenta.
How to trade
How to trade with this simple strategy is very easy.
- To look for Buy opportunities, wait for the 5 EMA line that crosses the 10 EMA from underneath, and the RSI line approaches the 50 levels and crosses from underneath.
- Sell opportunities arise when the EMA 5 crosses the EMA 10 from above and the RSI line approaches the 50 levels then crosses from the top.
The rule must be confirmed, between EMA and RSI have met the requirements to take action.
How to exit
This strategy suggests a target of 100 pips but traders can do protection and stop loss.
The recommended stop loss is 100 pips, but when it has reached the break-even point, this strategy suggests modifying the stop loss for protection.
Or maybe choose to activate the trailing stop feature of 40 pips or 25 pips, for automatic stop loss modification.
But will this strategy be able to work as it claims a profit of 100 pips per day? There is a disclaimer that past performance does not guarantee the results will be the same as in the future.
Unbelievable forex trading strategy no indicator
Trading strategies without these indicators may not be able to do all traders. Especially for those who are used to using indicators, it will feel awkward to work without a toolbox.
This strategy is also called a naked trading strategy, it only looks at a clean chart with a candlestick pattern composed of price behavior.
Even though the strategy is without indicators, the market approach may be different from the one shared by KingEURUSD in the Forexfactory forum, in the thread entitled “Trade without indicators. 90% profitable deal”
He shares a truly unbelievable forex strategy without indicators. Because it does not use support and resistance, or any indicators. Instead, he believes that all indicators end in failure.
The concept of this strategy is to find the cycle of the price wave, by finding a sales pattern, by opening an order when the price approaches the sales pattern zone.
This strategy may be a bit complicated because it is not known exactly what the sales pattern zone is.
Most trading strategies without indicators will look at price patterns, recognize whether what is happening is a range market condition, trending market.
Some of the important steps in a strategy without indicators are:
- Read the market structure, whether the market is sideways, the trend is weak, the trend is strong or the price is random and difficult to understand.
- Identify turning points, this is to determine entry points, usually by looking at price behavior when approaching support and resistance zones.
- Waiting for the confirmation signal, when the price approaches the turning point, like this traffic light is a yellow light, if the light is green then you can continue the journey. This means that if there is rejection in the support and resistance zone, it is a trading signal.
The easiest forex trading strategy ever
Of all the simple forex trading strategies mentioned above, which one is the easiest? In our opinion, the easiest is to use a Cross moving average or use the EMA and RSI. Trading rules are very simple.
But all will be back to each trader, for those who have above-average intelligence, a difficult strategy will feel easy. So experience and intelligence can determine whether something is difficult or easy.
A simple forex trading strategy is an easy way of trading. But how effective it is, traders may encounter many obstacles.
It may be necessary to recall what Rainer Teo once stated. Trading is not only about profit, but also sharing and caring. Requires a long journey and always has the motivation to learn with high dedication.
Past results do not guarantee the same results in the future, only spending cold money, and not by borrowing.
This article is for educational purposes only, not as investment advice, each investor is responsible for his investment.
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