Forex Trading Strategies And Systems

I've been trading the forex markets for several years now so I've developed quite a few different systems in my time. However there are some that are more profitable than others, so let me share you with you some of my most profitable forex trading strategies.

4 Hour Trading Strategy

I created this trading strategy myself and have been using it for several years now. This one system has generated more profits that any other system I have ever used, and yet it's surprisingly simple.

I simply look at the daily trend for a particular currency pair (usually the GBP/USD, EUR/USD or USD/JPY pair) using a very simple but effective technical indicator, then I wait for two EMAs (exponential moving averages) to cross over in the same direction on the 4 hour chart.

I will then enter a position (usually after a slight pull-back) and will employ a two-part exit strategy to maximise my profits. One half of the position will be closed out early for a safe profit, and the other half will be left to run for as long as possible in order to capture those really big price moves.

As I say, this particular forex trading strategy is highly effective, as regular readers of my blog will know because I share my trading results every week in my 'Weekly Trading Updates'.

Anyway if you would like to read all about my 4 hour trading method, you can access it (for free) by filling in the short form to the right and subscribing to my newsletter.

The only problem with trading this strategy is that there will always be quiet periods and particular days where you know you are not going to get any set-ups on any of the major currency pairs. Therefore at times like these I will often employ some of the other trading methods that I keep in reserve:

CCI Divergence Trading System

This is a forex system that I've recently created and it basically uses the popular CCI indicator with two different settings. The key here is to wait until there is divergence between both of the CCI indicators at the same time because this will give you a set-up with a very high success rate.

You don't get that many good set-ups per day using this trading strategy, but when you do, you are likely to make some decent profits because it is a very high probability set-up.

I have discussed this particular strategy elsewhere on this blog so please click here if you want to find out more about this CCI Divergence Trading System.

Forex Income Engine 2.0 Methods

At the time of writing (20 June 2009) I've just started using the three day trading methods included in the Forex Income Engine 2.0 course as well. I've always been quite sceptical about many of the short-term forex methods that I come across, but I've been very impressed with these three methods so far because they do actually produce some very good returns.

Anyway if you would like more details about each of these methods you can read all about them on my Forex Income Engine 2.0 review page.

Forex Nitty Gritty Method

This trading method was included in the Forex Nitty Gritty course and although it is a very basic method, it is actually surprisingly effective. The goal is to look for pairs that are in strong upward or downward trends, wait for a pull-back, and then enter a trade if the trend continues.

I've been using this method on the 15 minute charts for quite a while now and it has always performed well for me because these continuation trends occur all the time.

Again if you would like to find out more about this particular trading method, you may like to read my full review of Forex Nitty Gritty.

Long-Term Trading Strategy

I'm not really a long-term trader but I do occasionally open a position if a good trading opportunity arises. I will usually use the daily charts for these trades and will look at a variety of indicators such as the 200 day moving average, the supertrend indicator, established support and resistance levels, fibonacci levels if applicable, and Marketclub's excellent trading signals.

I will regularly post my long-term analysis of the various currency pairs on this blog, but I will only follow this up with an actual trade if I'm really confident about my predictions.

Other Forex Trading Strategies

Finally as well as all of the trading systems and strategies listed on this page, I also have a few breakout strategies that I like to use when a good opportunity presents itself. I'm also constantly testing out new ideas and reviewing the various trading systems that I get sent regularly by product owners who want me to promote their product.

However for the most part it's my 4 hour trading strategy that I spend most time on because this is my core system which generates the most consistent and reliable profits. All of the other forex trading systems are used to boost my trading pot during the quieter periods of the week.

Forex Trading Information

When you are looking for Forex trading information you can either buy it or get it for free. There is actually a lot of free information which can be very useful - but you need to find the right sources. If you do, you can build a successful Forex trading strategy at no cost.

Free Information

What you should do is learn all about technical analysis and everything you need to know you can get for Free. You can learn all about chart formations and indicators and there are many free chart services that you can use with full explanations included.

You can also get a lot of free information on money management techniques which is the foundation your systems success is built on. You need to understand everything about volatility and standard deviation of price and there is plenty of material on this too.

You then need to formulate a Forex trading strategy and put your indicators into a system. There are many to choose from but the two every trader should learn are, Breakout methodology and Dow Theory. If you learn these two methodologies, you will understand how the markets really move and how to generate high odds trades.

Is it worth paying for Forex Education?

Yes it is but be very careful what you do pay for!

There are a lot of vendors out there who will promise you riches but no one can do that, you have too make your own trading decisions. If you want good Forex information

Forex Trading Books

You can get a huge amount of great advice on everything from trading psychology to trading methods, all from your local online bookstore and from traders who “walk the walk” rather than simply “talk the talk”. The Forex knowledge you can get is invaluable and you can get a good selection of books for around a hundred dollars and this will be repaid many times over.

Forex Trading Courses

You can also get a lot of good Forex trading courses and you can get one on this site but of course were biased! However our view is a Forex trading course should have all the following elements in it:

• It should come from traders not writers and you would be surprised at how many courses come from marketing companies.
• It should come with full email support, in case there are any queries.
• It should come with a full money back guarantee if not delighted – you are taking the word of the vendor, they can deliver what they say in the advertising copy and you have a right to your money back if not satisfied. Never buy a course without a money back guarantee.
• If you can look for an accompanying newsletter so you can see the logic of the vendor demonstrated in real time and this also proves their traders.

So you can get lots of good free Forex information and of course, you can also buy it in the form of books and courses. Just use common sense when buying any information online and don’t go for information overload when formulating a Forex trading strategy, it should only take you a few weeks at most, then your all set to enjoy Forex trading success.