Beginner To Intermediate Forex Trading Strategies for Binaries

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Forex Trading for Beginners

This Forex Trading for Beginner’s Guide will give you all the information you need so you can start trading Forex. You’ll learn what forex trading is, how to trade forex, how to make your first trade, plus our best forex trading strategies. By the end of this guide, you’ll be equipped with the right knowledge to tackle the world’s largest capital market. As a bonus, we’re also going to reveal the best forex trading platforms.

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The Foreign Exchange Market is by far the biggest market in the world in terms of liquidity and trading volume. It’s estimated that, on average, more than $5 trillion are transacted on a daily basis. Clearly, the forex market is huge. Developing an effective forex trading strategy can earn you an almost limitless amount of money over time. It’s no surprise, trading in the Forex market is so exciting. Forex trading is free and it’s very cheap to get started as a trader in the FX market.

Successful forex trading is made possible due to leverage. Once you are able to hone your skills, you may be able to trade forex full time.

There are many reasons why you should learn to trade. The best forex trading strategies will empower you to earn a considerable amount of money over time. This doesn’t mean there aren’t disadvantages to Forex trading. There are pros and cons of trading forex that you need to factor in. If you want to have a good starting experience, you need to have a 360-degree view of the FX market.

You need the best forex training for beginners that is currently available. Once you are trained, you can learn how the Forex 24-hour trading market can give you access to trading, through the four major trading sessions (London, New York, Tokyo, and Sydney) regardless of your time zone.

Let’s get started and learn the inner workings of forex trading and how it works.

What is Forex Trading? A Basic Overview

Forex is an abbreviation for the foreign exchange market. In the financial world, Forex trading is also known as FX trading, currency trading, or foreign exchange trading which can be used interchangeably.

Unlike stocks which are traded on a stock exchange like the NYSE, the global Forex market is a decentralized market. Most Forex transactions are carried out over-the-counter or off-exchange. Stocks are listed on physical public exchanges, but Forex currencies have no physical location.

Check out the step-by-step process to follow before you start engaging in the over-the-counter market: Over-the-Counter Trading – How the Whales Trade.

The biggest players that operate in the FX market are the big banks, governments, major corporations, and hedge funds. These are also referred to as being the institutional market players. However, there are also quite a few individual traders involved in the market as well. These individuals are referred to as the retail crowd

The retail crowd is a diverse group. These can be consumers who want to buy goods from another country, travelers who’re looking to travel overseas, businesses conducting trade abroad or investors and traders who wish to take advantage of the price fluctuations in the Forex market. Now that we know the two parties let’s move on to the next section – How does Forex trading work?

How Does Forex Trading Work?

For example, if the price of the EUR/USD exchange rate is 1.1150 it suggests that we can get 1 euro for every 1.1150 US dollars.

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How to Trade Forex for Beginners?

The basic foundation of trading in the foreign exchange market consists of understanding how currencies are quoted and what the exchange rates represent. In the Forex market, all currencies are quoted in pairs. This is why the act of Forex trading involves simultaneously buying one currency against another currency, which is sold.

Let’s now examine how many types of currency pairs you can encounter in the FX market.

Type of Currency Pairs

Depending on how much trading volume a currency is carrying out, we can split currencies into three major categories:

  • Major Currency Pairs: These are all the currencies that are traded against the US Dollar, the world’s reserve currency. Eg: EUR/USD, GBP/USD, and USD/PY. The major pairs offer the biggest liquidity with EUR/USD being the most liquid currency pair.
  • Minor Currency Pairs: Also referred to as cross pairs and are currency pairs that don’t trade against the US Dollar. Eg: EUR/GBP or EUR/CHF. They offer less liquidity for trading.
  • Exotic Currency Pairs: Also referred to as minor pairs, are currencies linked to the emerging economies around the world. Eg: South African Rand, Brasilian Real, and Turkish lira.

As you can see, the American Dollar plays a major role in the forex market.

Next, we need to clarify how to read currency pairs and why we use a three-letter quotation system.

How to Read and Understand Forex Quotes

The standard quotation system uses a three-letter abbreviation system and will always involve two currencies where the first currency listed on the left is the Base currency while on the right is the quote currency. The quoted price indicates how much of Quote currency is required to buy/sell one unit of Base currency.

The next thing to understand is that currency pairs always have two prices: the Bid price and the Ask price. This is the two-way quote system used for buying and selling of currencies. In simple terms, the Bid price is the price at which you can sell while the Ask price is the price at which you can buy.

How to Use Forex Orders

Generally speaking, a Forex Order is a command given to your broker that shows:

  • What currency pair to buy/sell.
  • The direction of your trade (Long or Short).
  • The price to buy/sell.
  • Where to Take Profit.
  • Where to Exit.
  • How much quantity to buy/sell.
  • The type of order.

Direction wise, a Forex Order can be used to do two things:

  • Buy (Long) – If you expect the currency pair to rise, we use a buy order that is executed at the Ask price and closed at the Bid price.
  • Sell (Short) – If you expect the currency pair to fall, we use a sell order that is executed at the Bid price and closed at the Ask price.

There are five common order types that anyone can use to enter and exit a position in the Forex market:

  1. Market orders are designed to open a trade immediately at the best available market price. It can be used for both buying and selling. This order guarantees that the trade will be executed, but in volatile markets, the entry price can be slightly different than the last price quoted.
  2. Limit Order is designed to open a trade at a specific price and an expiration date. It can be used for both buying and selling. This order only guarantees that your trade will be executed at the desired price. For longs, the trigger price needs to be below the market price. For shorts, the trigger price needs to be above the market price.
  3. Stop Order is designed to buy when the trigger price is above the current market price and sell when the trigger price is below the current market price.
  4. Stop-loss order is designed to limit your losses and avert from potentially losing all your capital. If you’re buying and the exchange rate starts to go down the stop-loss order will automatically liquidate your position and minimize the loss.
  5. Take profit order is designed to close a profitable trade and lock in the profits.

This is the process to learn how to trade Forex for beginners. Once you are more familiar with the forex market, you will be able to use the London Breakout Strategy and various other forex trading strategies.

How to Open Your First Forex Trade

The first step you need to undertake is to open a practice account with your favorite Forex broker. This will give you a trading platform from where you can access the Forex market.

If you don’t want to wait for a particular exchange rate to be reached to open your first trade you can instruct your trading platform to open the trade at the current price level. This is called entering at the current market price.

You can instruct your trading platform where your stop loss, take profit and how much quantity you want to trade aka the position size. Your trading platform will do the rest.

In order for you to make a profit the market needs to go up after you bought. The same is true in reverse if you shorted the market; the price needs to go down to make a profit.

Leverage, Volume and Margin Requirements.

To invest and trade in the Forex market, you need to understand how margin trading works. Basically, whenever you open a trade you only need to put up as collateral a certain amount of your balance. This deposit is referred to as the margin requirement.

This means that you don’t have to cover the full position size, but only deposit a fraction of it to cover the possible losses. As long as your trade is active, your FX broker will lock up the required margin and only free it back to you once the position is closed. This enables traders to execute much larger trades than they could otherwise afford.

The margin requirement depends on three things:

  1. The instrument you trade: EUR/USD, GBP/USD, USD/JPY etc.
  2. Position size: This is the amount you buy or sell and it’s measured in lots. For example, 1 standard lot has a nominal value of $100,000 and it’s worth $10 for every pip movement. For example, if you want to trade $50,000 of EUR/USD that equates to 0.5 mini lots and it’s worth $5 for every one pip movement in the exchange rate.
  3. Leverage: Allows you to control bigger sums of money by borrowing from your FX broker so you can boost the profits of a trade. The standard leverage offered by most brokers is 1:50 and it can go as high as 1:500. Using a 1:50 leverage it means that you can control with every $1 from your account $50 in buying power. For example, if you invest $10,000 with a broker that provides you with 1:50 leverage it means that your total buying power is $500,000 (50 x $10,000).

The forex instrument, position size, and leverage you choose will depend on your working capital and your forex trading objectives.

How to Calculate Forex Margin

The margin requirement can be calculated using the following formula:

Margin Requirement = (Contract Size * Lot Size * Price) / Leverage.

For example, if you want to buy 0.8 lots of EUR/USD at the current market price of 1.1150 and using a leverage of 1:100 you need to have in your account at least $892 to open that position. In other words, with only $892 you can control a position size of $80,000 (0.8 lots) which is your buying power. Because of this, forex trading for beginners might be more affordable than you assumed.

Margin Requirement = (100,000 * 0.8 * 1.1150) /100 = $892

Again, if you haven’t checked it out already, we highly encourage using a forex position calculator while trading.

Let’s now study some of the market catalysts that can drive a currency pair.

What Drives the Forex Exchange Rate

The value of the currency pair can be driven by several factors including:

  • How well a country’s economy is doing?
  • Geopolitical events and how stable is a government.
  • Central Bank’s monetary policy.
  • Interest rates
  • News reports and economic data.
  • Supply and Demand.

These are a few of the factors that can influence the value of a currency.

Best Forex Trading Platform for Beginners

The best forex trading platform for beginners is the MetaTrader4 platform developed by MetaQuotes Software. The MT4 platform is one of the most popular Forex trading platforms utilized by millions of retail Forex traders around the world. Its features can be used by both experienced and beginning forex traders alike.

The MetaTrader 4 is free and it comes with many built-in features. There are countless technical indicators that can help you analyze a Forex price chart. Additionally, you can use the MT4 to build your own automated trading strategy and backtest any kind of trading ideas you might have.

Learn how to backtest your trading strategies even if you don’t have any experience with our Beginners’ Guide to Effective Backtesting.

Alternatively, you can use the web-based trading platform TradingView, which is another free Forex trading platform that has the same features as the MT4 platform and much more.

Without a forex trading strategy to advance your trading skills, a trading platform is useless. This is why we want to also explore the wide range of forex trading strategies

Below you’ll discover what are the different types of forex trading strategies that work.

Forex Trading Strategies for Beginners

Forex traders employ different trading styles that mostly fit their own personalities. We can break down Forex market trading strategies into four distinctive trading edges that can be used in different market environments:

While these are the most popular active FX trading strategies, Forex traders can use these concepts to innovate and develop well-versed Forex systems through the use of fundamental analysis and/or technical analysis. There are many tools a Forex trader can use to gain an edge in the FX market like Forex chart patterns, technical indicators, statistics and much more.

Check out a top-down approach to fundamental analysis of stocks: Fundamental Analysis of Stocks – 5 Financial Ratios to Follow.

In order to time the Forex market, you can apply a Forex strategy that is designed to improve your trading:

  • Forex trend trading strategies
  • Forex momentum trading strategies
  • Forex range trading strategies
  • Forex reversal trading strategies
  • Forex breakout trading strategies
  • Forex Carry Trade strategies

As a novice Forex trader, you have a wide variety of Forex trading strategies so you can take advantage of the currency price fluctuations. Since the market conditions are constantly changing, make sure you get familiarized with different types of Forex trading strategies.

Final Words – Forex Trading for Beginners

The basic mechanics of trading the forex market are similar to any other market. Buy low and sell high in the hope to generate a profit. Due to its unique characteristics, the forex market provides a wide range of trading opportunities that no other market does. The forex market, therefore, is very suitable for the novice trader that is looking to either make an extra income or a full-time trading career.

Forex trading for beginners can be extremely competitive. So, make sure you learn how to trade forex for beginners before you risk your hard-earned money. Learn as much as you can about the ins and outs of FX trading so, you’ll always be prepared to safely navigate the Forex market.

For more trading tips and tricks make sure you follow our Top 10 Forex Blogs list. The more you can learn about forex trading strategies, the more likely you’ll be able to become a successful trader.

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Three trading strategies for beginners

Simple forex strategy for beginners to trade breakouts and price pull-backs

Forex strategies to trade breakouts for newbies: trading with channel indicators, spotting channel breakout or the price rebound. Types of levels, rules for entering and exiting a trade.

I welcome readers to our trading blog. Today, I’d like to write about best forex strategies for beginners that use channel indicators, which are always treated as a separate category. Such strategies suggest entering a trade at the time of the channel breakout or the price rebound. Trading skills here are necessary to distinguish between the correction or the inertial price movement and the major trend direction. From this article, you will learn about price levels and simple forex strategies that works, based on them; you will also learn practical trading systems that apply combined indicators.

Breakout trading strategies for beginners

Any trading strategy is made, based on a particular regularity. It doesn’t matter if it is about fundamental or technical factors. An example would be entering a trade after a certain events (news publications) or when any indicators meet with each other. A separate group includes strategies built on the breakout of any important level or channel. Another way to interpret such kind of strategies is when the price returns in the channel after the rebound from its border or the rebound from the important level. The difficulty in trading with such strategies is to find out whether the price will break out the level or it will reverse. I will describe the important trading levels and give examples of real strategies with channel indicators.

Trading levels and level-based forex strategy

The psychology of forex level and channel strategies is that traders behave in the same way in particular situations, and trading together with the majority is often quite efficient. The psychology principle is as follows:

Each trader expects a particular target profit and each trader has his/her own risk limit. It is expressed in the fact that traders put stop losses and take profits at particular levels and these levels are the same for the majority. This is how strong support and resistance levels appear. Support is the level, below which don’t let the price fall; resistance is the level, above which bear don’t let the price grow. The strategy is based on that you enter a trade in the opposite direction when the price reaches the level, that is, you open a position on the price pull-back in the direction of the reversal.

The level breakout means that there has been come fundamental factors that encouraged most traders to open positions even when the price reaches the psychological level. It means that if there price hasn’t rebounded, a strong trend appears.

Both trading ideas are well illustrated in the chart of market capitalization.

The price has been trading between levels 200 and 250 during a month. Although the price hasn’t touched the channel borders, it is clear how it is rather smoothly moving from the bottom border to the top one and back. Arrows mark the moments of entering trades (the price chart of top cryptocurrencies corresponds to the market cap chart). Following the breakout of level 200, the price touches the next psychological value of 175, and follows by trading in a narrow range for a while. The second yellow circle highlights the new breakout and the start of a strong downtrend.

The difficulty of trading is to find out whether it is the breakout or the price is moving on by inertia and is about to reverse. So, there are a few tips to spot breakout:

Do be too early to enter a trade in the opposite direction if the price has touched the target level. Expect either a reversal or the movement continuation, followed by a correction.

Do not open a trade too early if the price has reversed without touching the level. It may not be a reversal, it may be rather a temporary roll back, after which the price will resume the major trend.

Pay attention to the trend features and its angle the angle of its movement. If the angle was narrow for a long time, after which there was a sharp change, this is a signal to enter a trade. An example of such a situation is on the figure above (the first yellow circle).

Types of Forex levels:

Fibonacci levels. It is an infinite series of numbers, based on mathematical approach. As experience proves, traders adhere to these levels intuitively. You can learn more about their nature and applications in this article. You can calculate Fibonacci levels, using calculator.

Psychological levels. These are levels that are based on human psychology, often being chosen intuitively. For example, they are often at round numbers.

Historical levels. They are strong levels that are regularly hit by the price, they are clear in the long time periods.

Mirror levels. They are the levels, which the price breaks through, returns to them after the correction and again goes in the main trend. The resistance level thus turns into a support level.

Pivot levels. They are the levels, drawn based on the history opening and closing prices. I will describe them in more detail in one of the strategies below.

Channels (dynamic) levels are similar with the only difference that the channel borders here look like flexible lines. There are many channel indicators and none of them can be said to be more or less accurate. Much depends on a particular market situation. I will give practical examples of such indicators further. Let’s see tree examples of easy forex trading strategies:

1. Basic forex strategy: Dynamic Channel Trading

This trading system applies the Keltner channel (KC) indicator, a combined tool that constructs a dynamic price channel. It is based on two standard tools:

ЕМА – Exponential МА.

ATR – Average True Range.

The principle of the strategy is that in a quiet market, the price moves inside the channel, taking its average values. When it deviates from the average values (i.e., moves towards the borders), it tends to return. The EUR/USD pair, traded in the M15 timeframe suits the indicator settings the best. It is not recommended to shorten the timeframe; it can be longer for other pairs if it provides more accurate signals.

KC settings: ЕМА period =20, ATR period ATR = 20, Factor = 1.5 (the factor, by which the ATR value is multiplied). You can download its free template for MT4 following this link.

Requirements to open a long position:

One or more candlesticks go lower than the channel bottom border. But there shouldn’t be more than 7 of them, as, otherwise, it can be about the channel breakout and the start of a new strong trend. The candlesticks must be located completely below the channel line.

The distance between the dynamic line and the high of the candlestick below it must be longer than 5 pips.

After all these requirements are met, a rising candlestick is emerging in the chart, which closes above the dynamic line. Differently put, the price has reversed and is going back to the channel centre. The longer is the body, the better.

You enter a trade at the next candlestick. A protective order is put at a distance of 15-30 pips. I recommend exiting the trade after the price has reached the channel centre. You may close 50% of the position, and protect the rest of it by trailing stop, having moved the stop loss at the breakeven.

Requirements to enter a short trade:

One or more candlesticks go higher than the channel top border. But there shouldn’t be more than 7 of them. The candlesticks must be located completely above the channel line.

The distance between the top dynamic line and the low of the candlestick above it must be longer than 5 pips.

After all these requirements are met, a falling candlestick is emerging in the chart, which closes below the dynamic line. Differently put, the price has reversed and is going down to the channel centre. The longer is the body, the better.

The entry and exit requirements are similar. An additional confirming signal can be a candlestick reversal pattern, formed beyond the channel.

The indicator performs the best during classical market movements, that is, in a calm market. Trading is avoided at the time of news releases, as there are many false signals during increased volatility. You had better also avoid trading flat and the Asian session. If the channel looks narrow, compared to the previous periods, you shouldn’t also enter a trade. You neither enter a trade if the signal candlestick looks too long, i.e. it has reached or is near the channel centre.

2. Trading strategy: Pivot levels breakout

This strategy utilizes a channel indicator that constructs Pivot levels, W1 Pivot. The indicator paints in the chart weekly support and resistance levels, at the breakout of which you can make profits.

First, let me specify what Pivot points are. A candlestick has a body and shadows. Shadows are the price highs and lows during a time period; the extreme values of the body are the opening and the closing prices. Pivot levels are the price reversal levels that are calculated according to the following formula:

R1 (resistance line) = (Price*2) – min.

R2 = Price + max – min.

R3 = max + 2*(Price – min).

S1 (support line) = (Price*2) – max.

R2 = Price – max + min.

R3 = min – 2*( max – Price)

Price is the reference levels that is calculated like this: (max+min+close)/3, where max is the highest price during a particular period, min is the lowest price, close is the closing price of the candlestick. This calculation method is the classic one. There are other, original variants, like Woodie, Camarilla, DeMark etc. I suggest you test on your own which calculation method provides the most accurate results. Please, do share your results in the comments!

You can download the W1 Pivot indicator here. The strategy is suitable for any currency pair, the best timeframe is H1. W1 Pivot settings: fortsize = 10, labelShift = 0. However, the formulas are the same and you can’t change them.

Requirements for entering a trade in both directions:

You set a pending Sell Stop order at level R3 + 10-20 pips. For less volatile currencies, you set stop at a shorter distance.

You set a pending Buy Stop order at level S3 + 10-20 pips, according to the same principle.

It is important to choose the right distance for stop loss and pending orders, they shouldn’t be triggered by volatility. A reference distance for stop losses is about 30-50 pips, the target profit may put at the same distance.

Although there are few losing trades, the signals are sent rather rarely. That is why you’d better apply the strategy to multiple currency pairs or use a complementary tool.

3. Forex strategy: Trading Dynamic Trend

It is a simple strategy but a dynamic one. It keeps the trader on the ropes. The matter is not just that you need to monitor the trades and the signals all the time; it is rather that it sends quite many false signals. But a few profitable trades are sufficient to cover the loss and gain. High-frequency trading gets use of probability law: you may enter one trade per day and get 100% of loss; but you can enter two trades and only 50% of them are losing. The more signals, the higher is the success chance.

The Dynamic Trend indicator, utilized in the strategy, paints dynamic levels, levels that are constantly changing, following the price. Trades are entered almost all the time wit ha turnover. The currency pair is EUR/USD, the timeframe is H1, but you may try changing it to M30. The indicator settings are Percent = 15 (the percentage of the indicator deviation), MaxPeriod = 50 (calculation period). You can download it here.

Requirements for opening a long position:

The price line has been below Dynamic Trend for some time.

There emerged a rising signal candlestick that closes higher than the indicator (breakout of the dynamic level).

You put an entry at the candlestick, following the signal one; stop loss is at a distance of 50-100 pips. After the trade has yielded 50 pips of profit, you close one third of the position; after there are 100 pips of profit you close another third and protect the rest with a trailing stop. If the candlestick goes below

Requirements for opening a short position:

The price line has been above Dynamic Trend for some time.

There emerged a falling signal candlestick that closes lower than the indicator (breakout of the dynamic level).

You open a position in a similar way. The trader needs fast response to the trade reversal in case of an error. However, you also need to keep in mind that the price may change its direction due to a correction; long stop losses in this case are a risk for the trader. You may adjust the rules for exiting the trade or change the currency pair. You may also draw the trailing stop manually, although it will distract you monitoring the trades entered. I offer curios traders to compare this level indicator with other channel indicators, attaching, for example, Bollinger bands. I don’t think it makes any sense to add oscillators.

Let’s sum up the information about channel trading strategies

Trading channels is useful because channel strategies have a clear way of application. The trader needs to select the right indicator, currency pair, timeframe and a good moment. Some tips on this:

Strategies of such type require constant monitoring. So, be prepared to spend quite much time on this.

Avoid trading at the time of economic data releases, during the first two hours of Monday mad the last two hours of Friday. Exit all trades before the weekend.

Do not try to open as many positions as possible, you’d better follow the rule that it is better to enter fewer traders but enter better ones.

Train yourself to “feel” the market. It is very seldom when all the conditions, price lines, and indicators signal the same; so, it is important to take a reasonable risk.

There are no perfect trading strategies; rather, there is a good combination of the market conditions, news and indicators. And, of course, you won’t succeed without professional experience. The more you learn different kinds of trading tools and the more you experiment with them, the more you improve your intuition. Therefore, I recommend you to learn about as many new indicators as you can, test them and gain experience on demo accounts and don’t be afraid of risk. I wish you successful trading and share the article with your friends! I am really looking forward to your comments, notes, ideas, and tips in the comments!

P.S. Did you like my article? Share it in social networks: it will be the best “thank you” :)

Ask me questions and comment below. I’ll be glad to answer your questions and give necessary explanations.

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The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

Strategies for beginners of Forex trading using simple indicators

In the previous article we have described some simple Forex strategies for beginners using popular indicators that are already embedded in most of the trading platforms. We are ready to offer you some interesting strategies to master which it will take a maximum of 20-30 minutes.

Simple strategies in Forex

The use of Stochastic and RSI

These tools we have already used in other strategies, and even combined these indicators on a single chart. Recall that RSI is the relative strength index, which is used as a subsidiary indicator, stochastic oscillator showing point of reversal. The original settings for the indicators:

The easiest way to master this strategy on the hourly chart e.g. GBP/JPY. The essence of the strategy is to determine what will be a break of a level and then using candlestick patterns to identify entry point and the closing point of the position. For this you need to put indicators on a candlestick chart (of the transition function with a line chart to a candlestick chart or bars which are present in each platform). Then follow these rules:

  • in the case of a strong (fast) uptrend check in which zone are the stochastic and RSI . If it is in the overbought zone (see Glossary) and the last black candle, the closing of which occurs in the middle of the previous one, you can open a sell position (short). Overbought area – the value of the stochastic and the RSI above level 75;
  • open a buy position (long position) when the indicators RSI and stochastic are in oversold zone and a white candle appears on the chart, closing of which is above the previous;
  • exit point – change the color of the candles and the exit of the indicators of the corresponding zones.

A strategy is used with the stop loss of 100 points. Simple strategy in Forex are always insured against possible force majeure!

The strategy of the tunnels

Simple strategies in Forex can be based on the use of the same indicator with different parameters. An example is the following strategy based on the indicators:

  • 18EMA, 28EMA – exponential moving average;
  • 5WMA, 12 WMA – weighted moving average. Gives more weight to recent signals precisely manifested on a sharply upward or downward trend;
  • RSI 21.

As you can see, the RSI is used quite often as a warning indicator, and most of the strategies are based on mathematical values of moving averages of different type. Recommended time interval – 30 minutes. Although this interval is more false signals, it is the optimal amount for training and understanding of the principles of moving averages.

18EMA, 28EMA is the red lines forming a tunnel (the corridor), which can be used to define the beginning and end of the long-term trend. 5WMA, 12 WMA help to determine the strength and the end of the short-term trend. The essence of the strategy:

  • the position is opened only when the tunnel with the red lines is relatively narrow or is traversed;
  • a long position is opened when the 5WMA, 12 WMA cross the red tunnel upwards. And if the 5WMA crosses the 12 WMA, the signal is strong, the RSI must be above the 50 level;
  • short position is opened, provided the crossing of the red tunnel weighted moving average down. Strong signal is the intersection of 5WMA WMA and 12 with a value of RSI is below 50;
  • a long position is closed when the chart price reaches the upper boundary of the tunnel, and goes below 5WMA 12WMA;
  • short position is closed when the price reaches the lower border of the tunnel is above 5WMA 12WMA;
  • any position is closed when the red tunnel cross each other, or much closer to each other.

The strategy is simple and complex at the same time. The difficulty is that the signals can be false, because the price depends on the volatility of the market.

Strategy for moving averages

Simple strategy in Forex is often based on different moving averages. This strategy uses indicators, about which we already told earlier:

The strategy is for any currency pair on the hourly time interval. The essence of the strategy:

  • open a long position when the 5EMA crosses the up-trend 6EMA with a difference of 1 point, ADX above the 20 level.

It is possible to add other EMA (with another parameters) for more accurate analysis.

We think this Arsenal of tools will be quite enough for you to understand the essence of Forex trading. In our next article we will move on to more complex strategies that will help to predict the right point of entry and exit from the market more accurately. The use of more complex instrumentation gives even greater assurance of successful transactions, and the functionality of such trading platforms as MetaTrader 4 allows to program the new tools yourself, or to download and install more indicators. Practice, develop more complex tools, and luck will be 100% on your side!

Binary Options Trading Strategies

Trading with Binary Options

Binary Options, known also as Digital Options or All-or-Nothing Options are not new financial instruments, but thanks to the new technologies, these are now available to the public and present an easier and faster way to make money.

The Digital option term derives from the digital nature of electronic devices which have only two states of being, “on” or “off” as with digital options trading.

When you hold a digital option, you are either in an ―On‖ state indication which means you are in the money or in an ―Off‖ state implying you are out of the money.

The value of the payout (Some brokers offer up To 85% return) is determined at the onset of the contract and does not depend on the magnitude by which the price of the underlying asset moves, so whether you are in the money by $0.01 or $0.05, the payout that you receive will be the same.

Binary Options are sometimes called all-or-nothing trades, meaning that either you are In-The-Money (ITM) and you get the specified payout, or you are Out-of-the-Money (OTM) and you lose your traded amount.

Binary options trading are a fast and exciting way to trade the financial markets. The payout rate trading digital options is high in comparison to any other traditional financial trading.

From the buyer’s perspective, the main advantage of binary options trading is that the Risk taken is limited to the premium that the trader pays up front to take on a binary option position. So in above example, the Risk taken by the trader is limited to $100 in that particular position.

This benefit means that the binary options trader can feel secure in knowing that their downside is limited to their initial trade size. While they can still profit if their market view turns out to be correct, they avoid having to worry about stop loss order slippage or losing their trading discipline.

Furthermore, binary options are a simpler trading vehicle having a limited risk profile since they either pay off a fixed amount or they do not, depending on where the underlying instrument is trading at the binary option’s expiration.

Another advantage is that binaries can often be traded for shorter time frames (1 hour, ½ hour or even 15 min) via binary options trading platforms then are typically available for normal options offered by exchanges.

Several types of Binary Options can now be traded online using a variety of binary options trading strategies.

High/Low: The most commonly available binary options are “High/Low” also known as “Above” and “Below” or “Call/Put” binary options. Basically, a trader will receive a payout on a long binary option if the market is higher than the strike price of an above binary at expiration, or under the strike of a below binary.

Fr om the buyer’s perspective, the main advantage of binary options trading is that the Risk taken is limited to the premium that the trader pays up front to take on a binary option position. So in above example, the Risk taken by the trader is limited to $100 in that particular position.

This benefit means that the binary options trader can feel secure in knowing that their downside is limited to their initial trade size. While they can still profit if their market view turns out to be correct, they avoid having to worry about stop loss order slippage or losing their trading discipline.

Furthermore, binary options are a simpler trading vehicle having a limited risk profile since they either pay off a fixed amount or they do not, depending on where the underlying instrument is trading at the binary option’s expiration.

Another advantage is that binaries can often be traded for shorter time frames (1 hour, ½ hour or even 15 min) via binary options tradingplatforms then are typically available for normal options offered by exchanges.

Several types of Binary Optionscan now be traded online using a variety of binary options trading strategies.

High/Low:The most commonly available binary options are“High/Low”also known as“Above” and “Below”or“Call/Put”binary options. Basically, a trader will receive a payout on a long binary option if the market is higher than the strike price of an above binary at expiration, or under the strike of a below binary.

One Touch:Some online binary options trading platforms also offer“One Touch”above or below binary options that generate a payoff as soon as their trigger level trades in the underlying market… even before the expiration time.

Boundary:Another popular type of binary option is the“Range or Boundary”binary that is characterized by a range that is compared to the underlying market at the option’s expiration. Typically, an ―in‖ range binary pays off if the market ends up inside the range, while an ―out‖ range binary pays off if the market ends up outside the range.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Get Your Sign-Up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

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Binary Options Trading: Brokers Reviews
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