Top 5 Advanced Forex Trading Strategies
The Forex market is another form of the foreign exchange market. It is the process of exchanging a currency into other currency for several reasons, might be for trading, or tour. According to some recent reports from the Bank for International institutes, the turnover of the Forex market is currently at more than $5.1 trillion.
In the next section, we will see the basics of the Forex market including the elements of it. Therefore, you would know how overall activity in this market occurs and how you can make a benefit from the foreign exchange market.
Forex trading strategies require a lot of knowledge about the market to execute properly in the price chart.
However, it is difficult to see what are the advanced Forex trading strategies as every strategy in the world has beginner and advanced features.
Advanced Forex trading strategy should include everything that a trader should know including the trade exhibition and trade management technique.
The forex market is driven by institutional traders who play with a lot of money. Advanced Forex trading strategies for Institutions are different from retail levels.
If you are a retail trader you should focus on what the big players are doing in the market. The market does not care about the accuracy of your strategy.
Instead, the market cares about what the big institutional traders are thinking about the market.
Professional traders have many techniques that they forecast to create a trading strategy. Before having a trading strategy, the trader should make sure that it has a long record of providing profitable trades.
Moreover, a good money management system and risk management system are also important to make the trading profits in the chart.
In the following section, we will see the top 5 advanced Forex trading strategies that a trader can follow to make a good profit from the forex market:
Advanced Forex Trading Strategies
There are a lot of reading strategies on the internet.
Some trading strategies need a lot of money that a retail trader often feels difficult to manage. On the other hand, some trading strategies require a lot of patience as it is very risky.
Considering this we have researched and found the top 5 advanced Forex trading strategies as mentioned below:
- Price Action
- Ichimoku Cloud
- Order Block
- Triangular Arbitrage
Scalping as a Process to earn quick profit from the market from the short term changes in the bid and ask price.
Scalping is very easy as it does not require any financial and economical knowledge.
Therefore, beginner traders often consider the scalping method as a primary trading strategy.
On the other hand, scalping has several forms.
This strategy that is used by a new trader is not the same that is used by advanced Forex traders.
In advanced scalping, forex traders usually read the market from top to bottom from the daily and weekly chart and come to the 5-minute chart on a step by step basis.
Trading scalping is logical as it does not require a lot of time to provide the result of the trade.
Sometimes traders can make 50 to 100 pips in just 5 minutes. If your scalping strategy is backed by big players’ intervention you can minimize the noise in trading.
However, in trading, we focus on probability only.
They are for besides having an advanced scalping method you should follow top-rated trade management rules.
Price Action with Context
Price action is the most logical trading strategy in the world that considers what the peak investors are doing in the market.
As the forex market is driven by central banks and financial institutes it is obvious for a trader to understand what they are doing with the price.
What is the market context?
Market contexts indicate the strength of a trend. Traders often find it difficult to rely on a trend as they fail to determine the sustainability of it.
Market context allows traders to know whether it will continue for a long time or you should close it now by determining the characteristics of the trend.
- Impulse- When the market cares about higher highs and lower lows, it creates a massive momentum which indicates that the price will continue more.
- Correction- Correction is a face when price barely has new highs and new lows. The correction usually appears after an impulsive trend which indicates an upcoming trade continuation pattern.
- Volatility- It happens in the price when there is no specific direction set by the market. In a volatile market structure, the price creates new highs and new lows but does not make any direction.
- Non-volatility- Non Volatility is related to the impulse. In a non-volatile market structure, traders find it logical to hold the trade for further again.
Ichimoku Kinko Hyo
Ichimoku is a trading indicator that is free in every trading platform. Let’s have a look some important elements of Ichimoku cloud:
- Kumo Cloud- Kumo cloud is a trading zone and it works as a support and resistance level.
- Senkou Span A and Senkou Span B- Traders use these to identify the market direction. Foe example, If the price is above the Kumo cloud, the overall trend is bullish.
- Tenkan Sen and Kijun Sen- These tools are placed at moving average concepts that work at a dynamic level. These lines move with the price and any rejection from these levels indicates a possible entry point.
It is a range, where market participants collect orders. As soon as they gather orders, the price starts to move.
Order blocks and order flow are common terms in institutional level trading. If you look at the image below you can see after a downward move, the market makes a correction when a new high and low has formed.
As soon as the market breaks out above this level, it retests near 50% of the order block before moving further high.
Triangle betrays is used by professional cross rate traders. There are three different transactions in three different pairs.
All these traits are considered as a set and it provides profit after completing all of the activities.
Despite it being a professional trading strategy it is not guaranteed that you can achieve 100% profit from it. Like other trading methods, it also has some limitations.
To remain successful in the trading industry you should focus on money management and risk management and decide on having a strong trading strategy.
There is no trading strategy in the world that can guarantee you a 100% profit.
The difference between successful and unsuccessful traders is how they are implementing their trade in the chart and how they are managing it with strong money management tools.