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Friday, 21 December 2018

3 Forex Strategies Used by Professional Trader


Talking about forex trading also means talking about various information about trading strategies that you can get on the internet. However, in reality not all strategies that are claimed to be "great" can really function.

In this article I try to summarize at least three strategies commonly used by professional traders.

1. Trading When There Are Strong Fundamental Driving Factors
This method utilizes the market response when there is economic data release. The market will usually move more volatile if the numbers from certain economic data are announced to be better or worse than expected.

For example, if the data of US non-farm payrolls (NFP) released are better than expected, the USD will usually strengthen significantly at least in the first 20 minutes. Conversely, if the data turns out to be worse than expected, the USD will usually be sharply weakened. Thus, the counterpart or "currency pair" usually will move up or down sharply too.

If for example due to the data the USD strengthens, then pairs such as EUR / USD, GBP / USD, AUD / USD and NZD / USD will move down. Thus, to benefit from price movements after the release of NFP data, traders open short positions on these pairs.

Economic data most often used to implement this strategy are usually US NFP and Fed interest rate decisions.

2. Using "Round Numbers" as Reference Support / Resistance
What is meant by "round number" here are price levels such as 1.50000, 1.0000, 0.50000, 100,000 and so on. Whereas those that are considered "not round" are prices as we usually see, such as 1.38775, 1.58837, 139,387 and so on.

"Round numbers" are also often referred to as "psychological levels" which are usually areas of key support or resistance.

For example, when you see a price moving above the psychological level area, then that level becomes a key support. You can open long positions with a stop loss reference in the area of ​​the psychological level. Conversely, if the price breaks below that level, you can actually get a chance to open short positions.

3.Using Technical Indicator Combinations
This is often referred to as a trading system. Professional traders usually use several technical indicators at the same time with the intention that one indicator can cover the weaknesses of the other indicators so that the resulting signal is expected to be more confirmed.

For example, you can see the technical analysis applied by the FOREXimf.com Market Analyst team. There we use the Stochastic Oscillator, Commodity Channel Index (CCI), Moving Average and Fibonacci Retracement.

Moving Average (MA) is used to help strengthen bias. If the trend is clear (for example an uptrend or downtrend), the MA is more functioning as an area of ​​dynamic support or resistance. But if the trend tends to be difficult to determine, then the MA can provide clues, about whether the intraday bias is bullish, bearish or neutral.

In addition, MA can also collaborate with Fibonacci Retracement to provide good information on entry areas. Actually the reference area for the entry market can be determined from the Fibonacci Retracement only, but if it is reinforced by the MA, that is, when the Fibonacci Retracement reference area intersects with the MA area, then the area will be more valid for entry market.

While the stochastic and CCI function as "trigger" or "trigger", which gives a signal to open a position (buy or sell). When the price is already in the reference area, then you are just waiting for the buy or sell signal confirmation from stochastic and CCI, according to the intraday bias.

Fibonacci Retracement also serves as a reference to prepare anticipation if it turns out our analysis is wrong. A break of key support or resistance based on the Fibonacci retracement will change the intraday bias from bullish to bearish or vice versa. This should be a "warning" if you have already opened a buy or sell position.

In order to optimize your forex trading, you should look for strategies that are truly suitable for you. In accordance with your character, according to the strength of your capital. Don't try to force yourself to use other people's trading strategies that don't suit you. Although for example this strategy can work well when used by that person, it may not necessarily work for you, because it is not necessarily suitable.

Read to Binary Trading Strategy Profit Thousands of Dollars
Read to Super Signals Channel Indicators: Reliable Trading Reach

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