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What are the most reliable Forex trading strategies?
By James Andrew
There will always be a need for the exchange of currencies, as long as people across the globe need to trade goods. This is why the Forex or foreign exchange market is the largest and most liquid of all global financial markets. Another aspect which makes the Forex different to other financial markets is that there is no central marketplace; all transactions are completed electronically over the counter (OTC).
A major factor in succeeding in Forex trading is finding a reliable broker from all Forex brokers. Another factor is knowing about Forex trading strategies, and which ones are likely to work for you. We are going to take a look at some of the more reliable Forex trading strategies that you may want to try.
The Blade Runner Strategy
Similar to many technical analysis strategies, the Blade Runner Strategy revolves around the position of market prices relative to historical averages. Using the Blade Runner strategy involves pure price action without the requirement for off-chart indicators which are only really used as an additional means of confirmation if required. The main premise of this strategy is that price activity is pivotal. In the majority of instances this strategy makes use of a 20-period exponential moving average (EMA) or the middle line of the 20-period Bollinger Band. This is where it gets its name as the line cuts through the price activity, serving as a point of reference for the sending of trading signals.
Daily Fibonacci Pivot Strategy
The Daily Fibonacci Pivot Strategy makes use of Fibonacci retracements together with daily pivot levels to achieve trade entries. There are various takes on this theme and you can find your own preferred parameters. An example of this strategy is to search for an entry on a currency pair which displays an average true range over the last five days that has been exceeded during the previous day’s trading.
At the start of trading, if the current price is above the central pivot, draw fibs from the low to the high of the previous day. If the current price is below the central pivot then draw fibs from high to low for the previous day. At this point you need to identify a confluence of the Fibonacci retracement levels with the daily central pivot. If the price retraces to the confluence you have identified then you can enter the market. Alternatively, you may want to wait for the confirmation of a candle signal. You need to weigh up the potential risks of entering early against the potential rewards.
Other Forex trading strategies
Of course, you do not have to stick with wither of these strategies, there are many more reliable Forex strategies out there, such as the London Hammer Trade, the Pop ‘n’ Stop trade and the Drop ‘n’ Stop trade. It is a case of finding the strategy that best works for you and provides you with the most reward for your efforts.
However, no matter what your preferred strategy is, you’ll want to ensure your broker supports you in your endeavours. Some brokers have an outright ban on certain strategies, whilst others are more ambiguous about their level of support. The ForexBrokersAZ guide to online brokers that support automated Forex trading strategies is a good place to start.
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