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Best strategies – Forex Day Trading

Best strategies – Forex Day Trading
August 25
15:54 2014

So you understand the basics of the forex financial market and have been able to amass some capital to participate in Forex day trading but are unsure if you would be able to make any money. Your fear is certainly legitimate as although the forex financial market is a lucrative one at the same time there are very large sharks in this market who practically control this market. You have to create an effective strategy to be able to make the most out of the forex day trading opportunity. Below are listed a few ways to get your started:

Forex Day Trading in Bladerunner Style

This is often known as one of the best forex trading strategies as it maximizes the profit margins with an acceptable risk margin. This strategy relies on finding the price action to find the required entries. There is a need to use pivot points, candlesticks, good old support and round numbers to make the most out of this strategy. The major component of this strategy is the on-chart indicator which is used   to measure the 20 EMA factor. This strategy can be applied at any part of the day but is often used for day trading while the Asian markets are open to try out different permutations with minimal risk, until you find the sweet spot that maximizes your return with an acceptable margin of risks and corresponding losses.

Using Pivot based Fibonacci Style for Forex Day Trading

This strategy deploys the Fibonacci extensions along with retracements along with regular pivots (weekly, monthly and yearly frequency). Typically the preferred parameters are around 37% to 60% of daily central pivot in confluence with the Fibonacci levels. This strategy falls in the same category as other free type forex strategies and hence has many possible permutations that can be applied.

Using Band Bounce Bolly Trade for Forex Day Trading

This kind of strategy best applies to a ranging market. This may not qualify as the most reliable strategy out there but many traders swear by its effectiveness and the corresponding returns when used in conjunction with confirming signals. This strategy pivots itself around the ability to predict the behavior of price for a given commodity where there is a probability to plot out the short term behavior of the given security.

The best way to make the most of this strategy so to ensure that you are using the outer bands to trade of any bounces you come across. This strategy may be less effectively in markets that are sharply trending but does very well in other anticipatory modes (in-range market) of the forex market. The starting point of this strategy is to always evaluate if the price point is in-fact in range as expected.

Using Stochastic Strategy or Forex Day Trading

This type of strategy has two basic parameters or stochastics – one fast and one slow – in conjunction with deploying the ability to select areas where the price for a given commodity is seen to be trending towards a predicted base number. You may also need to consider the 20 EMA indicator before deploying this strategy. There are a few basic rules of thumb to be followed in this case:

1, Always wait until the price point is trending strongly before taking an action

2. Always wait until you can ensure that stochastics indicators at their absolute extremities

3. Look for a candle pattern which is an indicator of the short retracement cycle until it reaches 20 EMA

Forex Day Trading

Using Overlapping Fibonacci Trade for Forex Day Trading

This strategy uses overlapped Fibonacci series to arrive at a suitable price point and is very popular with day traders as it is based on solid statistical model and tends to reap moderate to phenomenal results. The same strategy used along with the appropriate confirming signals may actually prove to the most accurate engine to be used in the forex financial industry.

Very often you would come across situations where all you need is two strong Fibonacci series based levels at a zone where the resistance and support of the market is unknown as this is probably the best opportunity to apply this strategy. Also keep in mind that any confluences you see with reference to the Fibonacci extension levels is also an opportunity to do trade by using this strategy.

Hammer Trade Strategy for Forex Day Trading

This strategy applies when the London trading center opens as this market is one of the most diverse and lucrative among all forex financial trading zones. This strategy relies on placing your bets and making money off it while the price point for a given commodity is on the upswing and is about to return back to its base price. So far this strategy has been found to be very effective in the London forex market time zone due to the relatively high predictability of this market sector.

The primary reason for this strategy to come into being is the high volatility of the European markets which basically throws the Bladerunner strategy for a toss. This strategy often uses rejection bars that forms at the resistance points after the price has moved beyond a narrow range.

Forex Day Trading in Bladerunner Reversal Style

This strategy is one of the most effective methods to catch the price point where the trend is about to reverse and the commodity price begins its trading on the opposite side of EMA. This strategy uses a polarity indicator (forex based) which is comprised of the Bollinger mid-band and the 20 EMA. In the absence of access to the polarity indicator it is advisable to just use these two factors themselves.

With this strategy the trend to look out for is the point where the price breaks off a channel range and trends for a while with substantial strength.

The above described strategies are very useful in conducting and taking advantage of the Forex Day Trading opportunity and while you may have some early disappointments your odds will certainly improve with experimentation and experience.

Best strategies – Forex Day Trading - overview
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Articles on the Jadenforex blog written by "Jadenforex" include guest posts, and items written in collaboration with several authors.

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