What Are The Best Currency Trading Strategies?
“I’m wondering what the best currency trading strategies are? I’ve been trading Forex for only 7 months now and consider myself and still consider myself to be in the beginning stages of learning how to trade currency. I have plans for becoming a professional currency trader and financial analyst. But now I need advice about the best currency trading strategies for trading the EUR/USD and the most suitable indicators for that pair and their parameters. Thank you very much.”
There are three elements to my currency trading strategy:
- Support and resistance levels
- Williams %R (62 periods, 90/10 trigger levels)
- MACD (standard settings, 12, 26, 9)
ENTRY
You are primarily looking for MACD divergence on the 1 hour chart. When price hits a support/resistance level and MACD is divergent, then look at %R. Be sure that the peaks are fairly close together.
%R has to enter or touch the 90 or 10 (depending on trade direction) and pop out in the opposite direction. As soon as it does, you enter.
I put on two lots and put the stops below/above the highest resistance/support points.
Risk only 0.5-1% of total account combined on both trades.
EXIT
I put one limit at the next support/resistance level in the direction of my trade. The other position I let run for as long as I think the price will keep going.
The profit target on the first lot must be at least a 1:1 risk:reward ratio.
Once the first target is hit, move the second stop to break even to lock in profit.
It tests very well and sometimes that second position can go on to make 100s of pips.
Hope that helps and good luck!
Cheers,
Hugh