Whether you’re new to Forex or an accomplished expert, you can always afford to learn new strategies. Today we’ll be looking at some of the best strategies in order to discover which one is right for your needs. And we’ll also be delving into our big question: how can you come up with the best forex trading strategy with this knowledge?
We’ll be starting with one of the simplest strategies in Forex trading, and we’ll move our way up to a more complex strategy and ways to supplement your strategies. The first strategy we’ll talk about will be the Support and Resistance Levels Strategy.
All Forex traders, whether they’re novices or seasoned veterans, should learn how to determine support and resistance levels on charts. The biggest benefit of support and resistance levels is that they are easily recognized. They don’t demand high levels of financial chart analysis, for that reason they can be used by both proficient and inexperienced Forex traders. This approach to Forex trading serves as a baseline for our trading activity and analysis and is a valuable addition to our own strategies. It is important to remember that support and resistance levels aren’t specific lines, but zones and the precise point at which they occur can’t be easily determined.
Next we’ll look at one of the most popular Forex trading strategies, Fibonacci, which is named after one of the most talented mathematicians of the Middle Ages, Leonardo Fibonacci.
Viewed as a medium or long-term Forex trading approach, it’s used to track recurring support and resistance levels. Evidence shows that the markets flow in waves and the Fibonacci strategy takes full advantage of this. Fibonacci ratios can assist us in identifying possible resistance and support levels on the Forex charts. The typical ratios are usually 31.8%, 50%, and 61.8%.
How can you come up with the best forex trading strategy using knowledge learned from these basic approaches? Well, in order to come up with the best strategy for you, we’ll have to look at how you can supplement these basic strategies using Horizontal Levels in order to develop a stronger overall method.
Horizontal Levels are a very simple concept in Forex trading and yet are extremely valuable for Forex trading strategies. Horizontal Levels are a fundamental piece of most Forex trading approaches and assist us in examining financial charts. In addition, they can also be applied on their own as a standalone strategy. Even simply observing the most apparent changes in price and drawing their horizontal levels we can execute profitable trades. We can recognize important trends that would otherwise be missed completely by thoroughly comprehending the horizontal levels of the more complex financial charts.
There are numerous other ways to supplement your overall strategies, such as using Multiple Time Frames effectively, observing Triangle and Wedge patterns, and many other effective ways to increase your accuracy and profits. As well as several other popular strategies that you can borrow from, such as Hedging, Scalping, and the Ichimoku Strategy.
These strategies and concepts should help you in creating your own strategies that best suit your specific needs, and if you want to create an even more finely tuned strategy for yourself, you can try researching additional strategies and supplements to complement your existing knowledge.