Successful Forex Trading Strategies Used by Top Traders

Successful forex trading strategies are the dream of every trader trading forex, they are what matters most. More than the actual financial success itself! And all these successful forex trading strategies do to some extent complement one another, as no single strategy is perfect. As one looks at the various forex charts, it is easy to see why this is the case. Profitable forex trading strategies catch market movements here and there, and each one does so in a different way. All of them combined, from the very basic ones, to the more advanced forex trading strategies end up capturing every pip of potential profit. Basically, all strategies tend to overlap one another slightly. And some may share basic principles. But because of the uniqueness each trader brings to the table, the strategies they develop tend to differ. So no two traders trade exactly alike, but may think along the same lines. Both simple and advanced forex trading strategies can work very well in the hands of seasoned traders. Traders who understand them well. Regardless of the level of sophistication involved in each one individually. If seasoned traders use them, it means that they are all profitable forex trading strategies which aim at making money in today’s currency markets. To a dedicated trader, being able to understand the markets and figure out the next move, is a great feeling because the financial markets are undoubtedly a great mystery to most people. And in fact most people treat them with suspicion, fear and cynicism. But the markets are not controlled by anyone. They are moving freely and are fair and realistic. And to the traders, they also are the world’s most equal opportunity employer. Because they don’t discriminate against race, age or personal background. Anyone with a strong will can be successful in the forex market, regardless of who they are. And while there is nothing wrong being a little greedy. Many new forex traders tend to be more greedy than knowledgeable. As a result, their greed gets the best of them, leading them to unrealistic trading goals, big losing trades and into blowing their accounts. Greed has to be kept under control, and allow the market, through the strategies used, to bring whatever profits are possible to the trader. By setting huge goals on financial gain, from day one, things become unrealistic. And with unrealistic goals profitable strategies are actually more dangerous, because they can create an illusion of invincibility. Good profitable strategies are just that, profitable, but only in the hands of wise veterans who know how to use them properly.

Successful Forex Trading Strategies For you
Success is a nice feeling. Veteran traders having succeeded in trading, are also successful in pursuing one more exceptionally difficult goal in their lives.

All Advanced Forex Trading Strategies are Exceptionally Successful Forex Trading Strategies

All sophisticated and advanced forex trading strategies go to great lengths in dealing with subtle market risk, because they have been developed slowly, over many years, and by traders who learned the hard way. These traders could no longer afford to lose money trading the forex market. With so much experience gained through all this forex trading info and the enormous number of data, it couldn’t have been otherwise. These trading veterans couldn’t have developed anything less than these advanced forex trading strategies, which are not simply successful forex trading strategies, but also a vindication of their long term determination, just like a Nobel prize is to a hard working devoted scientist. Life is not all about money, Nobel prize winners know this very well. And veteran traders too, learn to look beyond just financial success. It’s the pleasure of cracking the riddle, that drives them to develop further these already profitable forex trading strategies. The obsession of the human mind is so great with riddles, that solving a tough riddle such as the ones presented by financial trading, is a phenomenal success. In fact, many veteran traders see their success in solving such riddles. And they regard profits as merely a small vindication, through financial gain, for their work and all that time devoted. But the feeling of success is so much greater than money, and often beyond any price. Profitable forex trading strategies bring more and more confidence and vindication with every new winning trade they offer. And the amazing power of thought and will of those successful trading veterans goes a long way, and beyond just trading. Many of them have one more goal in life, which has nothing to do with the markets, and which they also achieve. Again through unbelievable perseverance and obsession, they succeed. These goals may be for example to travel around the world, to date some Hollywood movie star, or to make a big difference in the lives of people living in impoverished countries. It may seem obvious that all goals in life can be achieved simply by spending tons of money, but this isn’t so. Goal achievement requires much more than just money, and very few can plan right. Because just like trading, there are subtle risks along the way, which can ruin the plan. Only through realistic assessment, and meticulous planning, where risk is embraced, can these goals be achieved. And this is why many super rich people fail to do much good on the planet today, because they falsely believe that money can buy everything, including all the know-how needed. But this isn’t so, most problem solving needed around the world today, requires a lot of specific, priceless know-how, and much less money than politicians think. Veteran traders know how to develop know-how, because they had to invent their strategies from scratch. It’s not as if they could just buy those strategies on the open market, because nobody puts them up for sale.

 

Creating a Simple Forex Trading System

A good, yet simple forex trading system can be based on indicators such as LSS pivots, price momentum, moving averages or active trading hours. All of these provide insights from time to time, as to where the next opportunity will appear. Online trading can be simplified through such a system, so that the trader will cut losses short when wrong, and will not dig much deeper in chasing losses. In the case of CFD trading, which covers perfectly the needs of commodity and currency trading, much more than Futures do. The trader can practice in an online CFD simulator trading platform, and put things to the test. An effective, yet simple forex trading system is all about clarity and efficiency at low overall risk, as long as the system generates enough trades to make the trader’s efforts and time worth devoting. Curious traders will find it difficult to stick to such simple trading system for too long. They always want to dig deeper and look further, as they have a desire to explore more. So then comes the question whether such a simple trading system will keep the trader busy and active enough, so as to maintain an active interest. A simple trading system doesn’t stop the trader from doing their fundamental analysis. This field of research alone is so huge that it can keep the trader fully active, in a creative way, while the trading system will stay as is. If the fundamental analysis over the week or month in focus suggests that the market will go up, then they can simply refrain from taking short trades, even if the system generates such signals. Fundamental analysis is very motivational, and allows for enormous freedom of choice. So there is no excuse for a trader not to be busy, since they could be studying these fundamentals in great depth. Fundamentals cannot easily be quantified and put into equations and charts, or have probability analysis run on them. But they provide an underlying logic, which helps avoid many false signals on the technical side. And a simple trading system is always a technical one. There is no need for these two different concepts to be in conflict.

A Simple Forex Trading System
Simplicity suffers from inefficiency, but offers greater clarity when trying to solve a problem. Traders can combine the simplicity of technical trading with parts of the enormously complicated, but efficient fundamental analysis, without really mixing the two. There is no conflict because well timed fundamental signals always override technical ones.

Improving a Simple Forex Trading System

Improving a simple forex trading system further, is perfectly possible. Again, through the insights the trader finds in fundamental analysis, they can change technical parameters so as to make the signals more accurate. Traders know that a technical system relaying on LSS and moving averages will be wrong at least 40% of the time. This is expected. The improvement is about identifying big losers early, and cutting them short early. This can be done through fundamental analysis and by watching the trade in question for some amount of time. All stable profitable systems do have losing trades, and that’s why they can stand the test of time. Systems that promise very low percentage of losing trades are probably unstable and will suddenly stabilize, out of the blue, by producing too many losers all at once. It’s a law of physics, as things to tend to move towards greater stability. Trading systems that claim to defy this law are not in touch with reality. The trader can be profitable even if their system only produces 30% winning trades. Again, through fundamental analysis, they are able to identify winners and losers as they happen, and handle them accordingly. Whether or not an open trade is profitable is not about the open Profit/Loss figure. But rather it is about whether or not it is in line with short term fundamentals. So is trading online made easy through simple technical trading, filtered through fundamental analysis? The Answer is Yes! And a system of this kind is bound to be stable too.

Trading on Live Forex Signals

Even though all wise traders keep an open mind on their strategies, and break or bend all the rules, trading on live forex signals puts a lot of pressure on the trader. So limitations have to be imposed, through the use of rigid rules and discipline. Day trading forex live, or just having to act there and then, as soon as the signal appears, does require extremely sharp focus. What discipline offers to these fast-acting traders, is exactly the ability to stay focused. This is why all martial arts rely so much on discipline. Because there’s little time to think and react. Traders acting on live forex signals are still allowed to break rules relating to their strategy, but only in advance, before the trading session starts. During the actual trading session staying focused is their one and only priority, because there is no time to think. More experienced traders have developed methods for dealing with extreme volatility and fast moving markets, and specifically for assessing their day-trades, once they have been placed. If the time available to them is anything form a few minutes to half-an-hour, that is long enough to let the trade prove itself, and then apply their assessment methods. Some day traders apply time limits on their trades. So that if the trade is taking too long, and more than 30 minutes to become somewhat profitable, it is seen as a doomed trade, bound to become a loser. So such trades are closed past the 30 minute limit, regardless of profitability. Other day traders go further, and devise methods for actually reversing trades that they believe they are bound to become losers. And these methods can help traders be better prepared, no matter what happens next. The basic idea is that probability of success in day trading can be estimated in a matter of 30 minutes, as long as the trade entry criteria are valid.

Learn Live Forex Signals
If probability theory specialists were to develop a martial art, it would be just like the disciplined traditional martial arts found in Asian countries. It’s all about optimal movements of defense and offense, under the constraint of time, where the user doesn’t have time to think, — it’s all second nature to them. Successful day trading is based on probability too, and because of time restrictions, discipline is necessary, in order to make things work so that probability is on the traders’ side.

Live Forex Signals and Volatility

Volatility can produce false live forex signals, or just ruin signals that would otherwise have been good. Forex trading signals are often misleading or lack conviction. Because day traders don’t pay attention to momentum and volatility. Momentum can be identified through various indicators and LSS pivots. Volatility can be estimated based on the expectation of news release days. Typically, a currency pair will trade with limited volatility on the days and hours leading up to an economic report release time. And volatility will increase dramatically right after the release time. By paying attention to all these indications, traders can customize their strategies. A volatility-specific day trading strategy will work much better than a primitive strategy. Where all days are considered to have the same amount of volatility. All this forex trading info should be taken into account by traders, and this could allow them to handle their trading signals much better. It is worth mentioning that seemingly minor factors, such as volatility or LSS pivots, can have a huge impact. When all these different pieces of information are combined in a balanced way, trading can be enhanced dramatically. This is all because trading works on probability, and in probability theory even a seemingly minor factor can change the net result by as much as 30%. This is evident in games of thought, such as poker, where the player gains a seemingly small advantage, say 1.5% if they play some hands in a specific way. 1.5% may sound too small, but together with good money management it can have a huge positive impact on the player’s goals. In trading too, probability is in control, and traders can achieve order out of chaos. Small increases in probability of success result in huge increase in end profitability. Probability is also the basis for all sophisticated stock valuation models. And for assessing risk. Probability is carefully measured by all successful investment banks, and no number is too small or irrelevant to their analysis.

Safe Currency Trading Strategies

All currency trading strategies which have high tolerance of trading mistakes, and offer flexibility, are considered to be robust. There is always market risk involved, but the trader is not forced to make quick, impulse decisions. So by this definition one can develop safe currency trading strategies. Based on any low frequency strategy, one that tolerates volatility. Most traders who lose money trading forex, do so because they tend to trade at very high frequency, and to chase volatility too much. They also tend to have a strong belief in the idea that market price is always right — which is not true. Safe currency trading strategies cannot be very profitable, exactly because a huge portion of price fluctuation is missed, but that is precisely the concept. By avoiding much of the volatility, a lot of opportunities are missed, but a much greater portion of risk is also avoided. Slow traders take things lightly, and wait for a few good opportunities, so as to trade only through those well-selected opportunities. This naturally implies that they could always trade at much larger size, than they otherwise would. And this is perfectly safe, as long as the strategy is safe enough. And as always, extra security is provided by evaluating open losing trades in their early stage. This evaluation allows for losing trades to be closed early. It allows for other, less clear trades, to be hedged with an opposite trade, hence locking the open loss. And with other even more complicated trades, it allows the trader to assess each one of these trades over a period of days, not minutes or hours. Therefore the pressure to make fast and bad decisions is removed.

Learn Currency Trading Strategies
The feeling of safety is great as it helps reduce stress and evaluate trading decisions in a very realistic way. And to really be safe, traders should abandon the idea that market price is always right, because it isn’t always right!

What Makes Safe Currency Trading Strategies even Safer

Safe currency trading strategies can be made safer still. Simply by looking at the causes of false signals in the market. The effective way to do this, is to focus on the daily chart of the currency pair in question, and to do classic analysis. Simple swing point analysis and few chart patterns, when used in detail, can make up a complete powerful technical analysis method. A method for evaluating various signals, market moves, and of course open losing trades. These are all evaluation methods that the day trader doesn’t have. But the safe, longer term forex trader does have. Investing in foreign currency is part of safe, low volatility forex trading. Because the trader maintains an investor’s mindset, rather than a trader’s. The only difference is that they still trade with leverage, and use contingent orders. But as long as the flexibility is large enough, the trading strategy will work just like stress-free investing. The hidden power of the daily chart and its analytical insights are amazing. This is because the period of the markets is the day itself. Safe traders take chart analysis seriously, but they take their own trading lightly. There is nothing wrong trading various currency pairs, and doing appropriate analysis on each one, analysis that goes beyond the generic methods. This approach is appropriate as each currency pair is actually different, compared to other correlated pairs. Intermarket analysis is often good, but is not the holy grail. As it is possible for a minority of markets to lead the new trend, and for the majority of other correlated markets to be lagging behind. Many foreign exchange currency symbols look a lot alike, as often do their charts, as they are crosses of the same underlying currency. And generic analysis methods fail miserably from time to time, exactly because they fail to deal with the unique aspects of each currency pair that these symbols represent.

Advantages and Future of Automated Forex Trading

Automated forex trading has limited practical use in today’s markets. Nonetheless, it can deal nicely with some routine trading tasks and off-hours trading.

Beneficial Applications of Automated Forex Trading

Automated forex trading is characterized by low profitability and an overall inherent instability, which prevents it from becoming more profitable. As soon as the user pushes for more profit, by changing the parameters, stability is lost. And ultimately, profitability is short lived once these parameters have been pushed too far. All in all, automated forex trading is no match for manual trading — not by a long short. There are however very specific online trading situations wherein such software-based trading provides a solution. These specific trading needs have to do with off-hours trading, and very strict criteria trades, both of which are too resource-intensive for a human trader to handle. Traders who use automation successfully, and in a stable way, are specialist traders. They do a lot of manual work, working through many charts and markets. And only a handful of limited periods of time are handed over to automated trading. The hard work has already been done prior to allowing the software to trade. The whole purpose of using this software, is to save time. Or to execute very specific trades, where contingent orders have to be of very specific size. Trading software can stand guard for many hours, and only execute the trade in question if and only if the strict criteria are met. This is often the case during major trend reversals and expected market moves. But beyond these applications, automation has failed to deliver superior results.

Automated Forex Trading
Quantum computing will definitely take many systems out of the stone age and into a new powerful future. Automated trading will surely be one of those. It is unlikely that it will help pattern recognition science beat the markets. Certainly it will not happen through any commercially available products. But we may see great possibilities whereby wise traders will set these systems in motion, and will only sporadically readjust parameters; All this in contrast to today’s primitive automated trading systems.

High Frequency Automated Forex Trading

High frequency automated forex trading is a more realistic possibility, but it still is in its infancy. Developers of any such successful and stable trading systems are unlikely to make them available for sale. Such high frequency trading still suffers from changes in market volatility. Which just like in the case of scalping end up causing very large losses when they happen. Day trading forex live through a high frequency, automated approach is a realistic possibility. Developers however lack the analytical skills required to model volatility and other risk factors, in a mathematical way. And as with all algorithms, if the theory is not correct the software end-product will not work well either. Software products such as forex robots are capable of winning forex trading competitions and producing large profits. But success is short-lived. And after several weeks the algorithm starts to fail miserably. And it even risks losing big money. If a forex robot was very good. And it only needed manual parameter adjustment about once a week, it could keep on working well. But this parameter adjustment would be so complicated and very few clients could possibly handle it. So is trading online made easy by automation? The answer is, YES, but only in very specific circumstances. Mathematicians on the other hand believe that the supercomputers of the future, relying on quantum processors, will generate impressive results. They will be able to run high frequency trading software much better. And parameters may only need to be occasionally tweaked, by data algorithmiscists.. These systems will still fail at some point, but they will have much longer winning streaks than today’s systems. It remains to be seen how the mathematics of pattern recognition will benefit from quantum computing.