best-forex-strategy-1

Best Forex Strategy

Forex Brokers

Best Forex Strategy

Here’s one of the most easy and best forex strategies I have ever used. I will provide you with 2 different versions, the standard version and the filtered version using the well-known stochastic oscillator. This strategy is trend-following and can be used for scalping, day trading, swing trading and long-term currency trading.

Chart Setup

Used indicators: MA ribbon filled.89.21.ex4, Stochastic oscillator (5,3,3)
Preferred time frame(s): any
Trading sessions: London and US session for scalping and day trading, around-the-clock trading for swing and long-term trading.
Currency pairs: any

Download

Download The Best Forex Strategy.

Example: AUDJPY H1 Chart (standard version)

best-forex-strategy-1

The figure above is an example of the standard version of this strategy in action on the 1 hour AUDJPY forex chart. It shows our proposed buy and sell entry points (arrows) in the up-and downtrend. The standard version generated 3 entry points, 2 short entries and 1 long. 2 Winning trades and 1 small loss (1st short entry point).

Standard Strategy Trading Rules

Buy conditions:

  • The Ribbon indicator histogram changes from red to green color.

==> Open buy trade. Place your stop-loss below the most recent swing low point (short-term support).

Trade exit (TP): (1) Set your own profit target, for example 40 pips, do not wait for an opposite trading signal issued by the Ribbon indicator. (2) Wait for an opposite trading signal (Ribbon sell signal) to close the long trade. The second take profit option works best in strong trending markets.

Sell conditions:

  • The Ribbon indicator histogram changes from green to red color.

==> Open sell trade. Place your stop-loss above the most recent swing high point (short-term resistance price level).

Trade exit (TP): (1) Set your own profit target, for example 50 pips, do not wait for an opposite trading signal issued by the Ribbon indicator. (2) Wait for an opposite trading signal (Ribbon sell signal) to close the long trade. The second take profit option works best in strong trending markets.

Example: GBP/USD M5 Chart (filtered version)

best-forex-strategy

The figure above is an example of the filtered version of this strategy in action on the 5 minute GBPUSD forex chart. It shows our proposed sell entry points in the downtrend (red ribbon indicator). The Stochastic indicator helps us to go short at the best currency price. Read the rules below.

Filtered Strategy Trading Rules

Buy conditions:

  • Green colored Ribbon indicator (down trend)
  • The Stochastic oscillator turns back above 20 from below (oversold).

==> Buy now. Place a protective stop-loss slightly below the most recent support.

Trade exit (TP): Use 1.5 risk to reward ratio (i.e. risking 30 points to make 45) or use a trailing stop to let the trade run until it is hit by the trailing stop.

Sell conditions:

  • Red colored Ribbon indicator (down trend)
  • The Stochastic oscillator turns back below 80 from above (overbought).

==> Sell now. Place a protective stop-loss slightly above the most recent resistance level.

Trade exit (TP): Use 1.5 risk to reward ratio or use a trailing stop to let the trade run until it is hit by the trailing stop.

Related Post

Comments

comments

Leave a Reply