Types of Forex strategies. Four basic trading strategies. There are two groups of indicators in total

Hi all!

Friends, I haven’t written posts in the section for beginners for a long time, and today I want to publish a useful article about species trading systems. As a rule, “profitable” traders use several various types trading systems to diversify risks and increase trading profits in general. What types or classes of strategies are these, what are the features of each of them, and what are the distinguishing criteria for a particular strategy to belong to a certain type? We will talk about all of this below.

In addition to standard discipline, psychological stability and concentration, any novice trader must first develop systematic thinking, which is based on a trading system. For this purpose, trading systems were created and later classified, which are intended for the synthesis of carried out preparatory work in the form of: graphical, wave, candlestick and indicator analysis.

In this article, we will look at 10 famous types of trading systems for trading on the Forex exchange.

№1 . One of the most common, popular and most profitable types of trading systems on foreign exchange market Forex is - Trending. It is based on assumptions about a trend of growth or decline; if it begins, its stability and continuation are traced. The trend, from which the name of the system originates, is considered relative to a certain time period.

A clear example of a strategy that belongs to this type of trading system is the one I described in previous articles.

It should be distinguished that what is defined as a trend on the daily chart in a monthly perspective often turns out to be a market correction. is based on indicators, but in most cases the analysis of the data they provide shows the strength at the end of the time period, or with a more sensitive setting they can signal false entries. Therefore, when using a trend type of trading, you should approach such starting data with caution.

№2 . The second group of trading strategies, based on the assumption that prices move within a corridor or channel, limited by levels of resistance above and support below, is called Flat or gridiron . The flat strategy, or as it is called the channel strategy, organizes trading by buying near the support level and selling near the resistance value. In addition to determining levels, which is not always possible to do by objective reasons, a strategy is sometimes built using oscillators. A combination of oscillators with .

In the following articles of the forex blog, I will describe one interesting and proven flat strategy, so as not to miss the publication of this trading system. subscribe to updates.

№3 . Another type of trading system, which is used by more advanced traders, is counter-trend system , based on the definition of a point. Correctly determined moment of reversal allows you to get maximum profit during the reverse movement, but the use of these strategies is associated with a large number of false entries and a very close stop loss level. Counter-trend trading includes strategies using , and others.

№4 . To complement trading strategies, or in some special cases, systems based on are used, which are a characteristic combination of a price model and its derivative over a period of time, which has a predictable continuation according to statistical data. The most famous patterns include “Adam and Eve”, “head and shoulders”, “two peaks”, “folding meter” and others. Here are links to materials on Forex patterns that are effectively used when trading Forex:

№5 . Some traders often use intuition and, according to these qualities, use a system based on wave analysis , based on Elliott’s theory and suggesting that market behavior depends on the psychology of participants, expressed in impulsive behavior. The wave cycle, defined on the corresponding diagrams, is determined by the trend impulse in the forward direction and correction in the opposite direction, while the waves have a pattern and their own structure. In the following articles, I also plan to provide an interesting system based on wave theory, if you are interested, don’t miss it!

№6 . There are also types of trading strategies that assume that the significant event is the fact that the price leaves the established range, thereby having a chance of developing a trend. Such trading systems are called based on volatility breakout (read more about volatility in Forex). The boundaries are determined by their location at a slight distance from current prices, and the distance to them is determined by the current overall market volatility. The quality and quantity of transactions when using such a system will be determined by establishing a breakout threshold, which, when placed close to current prices, will result in a large number of false signals, and removal will lead to a decrease in the frequency of transactions. Examples of this type are strategies built on the principle, etc.

№7 . In addition to the systems described, there are also session trading . This type of trading systems is characterized by trading strictly during a specific period; this predetermines the use of certain currency pairs that are most active during these sessions. An example of this type is the “London Explosion” strategy I recently reviewed in an article about.

№8 . One of my favorite types of trading systems are strategies that are based on trading. This class combines the features of trend and pattern trading, and also makes significant use of wave analysis. Principle - the price should create corrections from the trend by fighting off special levels that are built on the basis. Examples profitable strategies of this type (directly used by me when trading) are:

№9. Pip trading strategies , also known as scalping, are based on trading within the trading day and are characterized by small take profit levels with relatively large stop loss orders. Examples of pip trading can be found in my recent article about

So, friends, in conclusion, we can say that each type of trading system is selected by participants depending on market situations, experience in use, the trader’s own training and style. It is also worth noting that the choice of the type of trading strategy greatly influences the trader’s temperament, i.e. You must feel this and choose a strategy for yourself not according to its profitability and complexity, but first and foremost according to its comfort, and then the trader himself can add and apply developments or additional ones to it, thereby adjusting everything according to himself (this, in fact, in fact, a very important aspect).

Therefore, on the path to discrete algorithmic trading, a mandatory stage that any trader must go through and master is systemic trading, i.e. trading according to the rules. This serves as a kind of simulator for instilling discipline and self-control, which, whatever one may say, is inherent in any successful trader.

This, friends, is the end of the article on types of trading systems; I think it will be useful for novice traders and will contribute to the understanding of systemic trading. In the future, a large number of proven and original trading strategies will be regularly published on the Forex blog, so don’t miss their release and subscribe to updates!

Bye everyone and happy trading!

Best regards, Alexander Siver

Do you think there are many factors that directly influence your effectiveness as a trader?

In fact, there are dozens of them, but the most important and key is precisely chosen trading strategy. And it doesn’t matter whether you created it yourself or downloaded it from the Internet. The main thing is how you cope with its application! But here’s where it all happens, it’s not that simple at all -)

After all, no matter how much we want it, there is simply no strategy in nature that would always give profitable signals in any market conditions. Unfortunately, the market is heterogeneous and tends to change suddenly.

Therefore, beginners who do not know the basic principles of building strategies, what exist, what market features they are aimed at and where the very moment comes when the tactics necessarily fail, are doomed to lose their money...

For example, a novice trader should initially understand what a “TREND” strategy is and what actually stands behind this concept, other than just a beautiful and abstract term.

By the way, for this topic I want to say thanks to the blog reader, Dmitry, who often asks questions like “Sergey, how many candles in this strategy should you set expiration on...be more specific” -) Of course, I won’t give a specific answer to this question , but the information below will help you find answers to such questions yourself...

So, in order to complete your knowledge, I propose to get acquainted in detail with what types of strategies there are, what are the weak points of each of them, and most importantly, we will try to develop simple algorithms for solving the weaknesses of this or that type of strategy.

Types of Forex trading strategies, binary options and CFDs

So, the first criterion, according to which almost all strategies without exception are divided into types, directly concerns the characteristics of price movement, the state of the market and how the trader positions his signals relative to it.

Trend Strategies

The basic feature of these strategies (an example of a trend strategy) that distinguishes them from all others is that the trend and its definition are put above all else, while the entry point recedes into the background.

This occurs due to the presence of trend indicators in the strategy or other trend tools (for example, trend lines). As a result, such strategies have a noticeable lag, and at first the transaction may hang around zero for a long time until it happens real movement towards you.

Traders who use such strategies should clearly understand that they should not expect an ideal entry point, which is so necessary for scalping on Forex or CFD and in turbo options trading. Yes, a feature of trend strategies is the averaging of market noise, so trading on minutes or five minutes may seem very sad for a beginner -)

These shortcomings can be eliminated very simply, namely - trend strategies should be used carefully on small time frames, as well as on assets with low volatility!

In addition, it is easy to understand that the main enemy of trending tactics is the sideways market (flat), or the so-called chatter in place. Therefore, you should only trade during active sessions.

Countertrend types of strategies

In fact, a countertrend strategy is only a part of any trend strategy. Countertrend means against the trend -)

The main task of any counter-trend strategy (example) is to make money on a rollback of the global trend, or to catch the moment of reversal before anyone else. In fact, this type strategy is one of the most aggressive and dangerous, since you should trade against the trend, and therefore against the crowd and big players.

In practice, counter-trend strategies are quite difficult to implement in binary options trading, since it is common for them to sit out a loss for quite a long time. In CFD trading or the foreign exchange market, the use of similar tactics occurs, but usually in combination with Martingale.

Among the disadvantages, we can note the fact that the trader, in fact, sacrifices a huge number of losing trades for the sake of one unrealistically profitable one. As a result, a huge number of unprofitable signals, psychological stress, and stress.

And don’t be surprised, in fact there are such fanatics or psychological masochists who trade exclusively against the trend!

Flat types of trading strategies

The trend always changes to a flat, and as many studies show, the market is sideways more than 50% of the time.

A feature of such strategies is the presence of oscillators or a channel indicator, and the principle of trading comes down to opening transactions from the narrow boundaries of the range.

In practice, the flat type of strategy (example) works great in a calm market, and no matter how strange it may sound, they are very popular among scalpers, since their entry points are quite accurate. However, problems with such tactics begin when real trends appear, since such indicators will give dozens of false signals.

It’s easy to overcome a huge number of false signals - trade during inactive periods trading sessions when the market is sluggish and weak. Actually, for this reason, many scalpers prefer night trading.

As you may have noticed, each of the global types of trading strategies is effective in its own way and, at the same time, weak at certain moments. The ideal solution and specific answers to the questions, the example of which I gave at the beginning, simply does not exist. For all times and occasions, as they say...

The only thing you can do is to use testing tools correctly and tirelessly sharpen your skills real trade on a demo account or paper!

Yes, today we sorted it out types of trading strategies on the stock exchange, so that you clearly understand the advantages and disadvantages of each of them. And already the types of strategies, that is, short-medium and long-term.

Nowadays, more and more people are striving to improve their well-being without making much effort. And this opportunity, according to many, comes from trading on the Forex market, the largest foreign exchange market in the world. The principle of its operation is that exchange rates different countries, constantly changing in relation to each other, and from the difference that arises you can earn a certain amount, sometimes quite a decent one. It seems that everything is simple: register on the trading platform, invest a certain amount of money, install an advisor and wait for income, but this is not entirely true.

In order to become a successful trader and stop throwing your money away, and actually make a profit from it, you first need to study some information. Firstly, what is Forex, who trades on it and how, what are currency pairs, what are trading strategies or Forex strategies and what are they for? Having figured out what's what and why, a beginner can safely open a demo account and try his hand without entering real money. At this stage, it is appropriate to apply a variety of Forex strategies, test advisors, or try to place bets on one currency pair, and on several. In this way, a novice trader will gain experience for trading in the market. He will be able to choose the trading tactics that suit him best.

A Forex strategy is a set of actions carried out by a trader with his account, that is, in another way, it is a way of trading on the foreign exchange market. Strategies can be short-term (opening and closing bets during the day), medium-term (waiting for a convenient moment to open and close bets within several days) and long-term (you can wait for a bet to close for several weeks). There are also combined types of strategies, but it is better for a beginner to use one type in the initial stages of his activity.

All existing advisors are developed based on these three types of trading and differ in this regard by the speed of closing and opening bets. In addition, it is important for a trader to know that each advisor is written for a specific trading platform and you need to use it on another platform with caution, having previously tested it for several weeks, or better yet, months.

If a trader has been well trained on a demo account and feels quite confident in the market, he can open a real account, for starters a cent account is better, however, the emotional component here has great power. Happy trading everyone!

There is a great variety trading strategies to work on Forex market. Most of them are based on indicators technical analysis, there are also strategies based on fundamental analysis. Some traders are adherents of indicator-free strategies. Let's talk in more detail about which strategies are the most effective.

Each trader must determine his approach to trading - conservative or aggressive. The conservative style assumes minor risks and low returns. In this regard, trend-following trading strategies are more suitable for a trader. As the famous stock exchange saying goes - Trend is your friend. An aggressive trading style involves high risks and increased profitability. Often, the profitability of aggressive traders reaches 1000% and in this regard, it is most effective to use a countertrend trading strategy. Since the market is trending only 1/3 of the time, trend strategies are less effective for aggressive traders.

Now we need to talk in more detail about the trading systems themselves. Let's start with trend following strategies. Trend strategies allow a trader to trade with maximum potential profit and a minimum load on the deposit. The most effective technical indicators that allow you to determine the trend are moving averages (MA). For hourly candles, moving averages with periods of 24 and 120 are best, and for daily candles, moving averages with periods of 21 and 130 are best. Using these indicators, we identify the presence of a trend and its direction in the market. If both averages are directed upward, we are dealing with a bullish trend; if both averages are directed downward, we are dealing with a bearish trend. As the classic rules of technical analysis say, in a trend it is necessary to trade in the direction of the main trend after the correction. The figure shows a daily chart of the GBP/USD pair: both averages are directed downward, so we are dealing with a downward trend. We are waiting for the correction to develop, the price enters the area between MA21 and MA130, and then we open a Sell position in the direction of the main trend. Thus, trend-following trading strategies based on moving averages are quite simple to understand and effective to implement.

Let's move on to countertrend trading strategies. Since the market is flat most of the time, the most effective indicators are oscillators. To build a trading system, you can use the most popular oscillators among traders: , RSI, MACD and others. Consider the action of the RSI oscillator as an example. The RSI indicator ranges from 0% to 100%. When the indicator line drops below 30%, it means that the instrument is oversold. Above the 70% line – overbought. For hourly candles, the best period is 9, and for daily candles, period 11. The exit of the indicator from the overbought/oversold zone signals us to open a sell/buy position, respectively. (Figure 2). The oscillator gives a stronger signal during periods of divergence. Divergence is a discrepancy between the direction of the indicator and the price chart. When the price on the chart makes a new low, the indicator is in the oversold zone and cannot set a fresh low - they talk about bullish divergence. When the price makes a new high, the indicator is in the overbought zone and cannot set a fresh high - they talk about bearish divergence. (Figure 3) Thus, a countertrend trading strategy built on just one technical indicator is capable of showing fairly effective results and is also easy to understand, which is especially suitable for beginners.

A trading robot is a small program that allows you to trade on the market automatically, without human intervention. In other words, this program opens and closes trading positions in accordance with the settings of the advisor, that is, it works according to a certain algorithm. Every year, a great variety of trading robots appear in paid and free access, which implement a wide variety of strategies. A trading robot based on the Martingale strategy is especially popular among many traders. The robot opens a Sell position with 1 lot with the Take Profit and Stop Loss parameters of 25 pips. The price went up, Stop Loss was triggered. Then the robot takes another Sell position, but with 2 lots, with Take Profit and Stop Loss parameters of 25 pips. This trading strategy is based on the postulate that the price cannot move in one direction forever; sooner or later there will be a rollback, which will allow you to take a profit.

The Clever FX encyclopedia is ready to help every trader increase the level of theoretical knowledge, which will be useful for building their own trading strategies. In the “ ” section you can familiarize yourself with a large number of indicators that can be used as the basis for your own trading strategy.

Have you already decided on your trading style, chosen a suitable strategy for yourself and are ready to try your hand at the Forex market? Then you need to register a trading account with FreshForex, top up your deposit with any in a convenient way, install trading terminal Meta Trader 4 and...now you can trade on the biggest financial market planets!

Friends, every trader has standard discipline, mental toughness and concentration. This goes without saying. But do not forget that it is necessary to develop systems thinking, which is based on the trading system.

In this article, I propose to structure your knowledge about trading strategies and basic classifications. For those who already know, we repeat!

Trading strategy

A full-fledged trading strategy must contain clear entry/exit conditions, taking into account the time intervals used, rules for capital management (or money management) and compliance with risks.

The main objectives of the trading system: determining the algorithms for the trader’s decision-making process and limiting the factor of emotional influence on the course of the transaction.

Trend Strategies

Let's start with trend strategies.

One of the common, popular and most profitable types of trading systems on the Forex currency market is the trend one.

It is based on assumptions about the trend of growth or decline, if it occurs, its stability and continuation are traced. The trend, from which the name of the system originates, is considered relative to a certain time period.

It should be remembered that what is defined as a trend on the daily chart often turns out to be a market correction on the weekly timeframe. To determine the strength of a trend, many tools are used, including indicators. But in most cases, analysis of the data provided by the indicators shows strength at the end of the time period; however, with a more sensitive setting, they can signal false reversal movements.

Therefore, when using a trend type of trading, you should approach such starting data with caution. Trading systems of trend type in conditions other than market trend, are absolutely unprofitable due to the large number of false entries.

Flat strategies

The next type is flat strategies.

They are based on the assumption that prices move within a corridor or channel, limited by resistance levels at the top and support at the bottom.

The flat strategy, or as it is called the “channel strategy,” organizes trades by buying near the support level and selling near the resistance level.

In addition to determining levels, which is not always possible to do for objective reasons, a strategy is sometimes built using oscillators. A combination of oscillators with resistance and support levels is possible.

Another type of trading system (used by more advanced traders) is the countertrend system.

It is based on determining the trend reversal point. Correctly determined timing of the reversal allows you to get maximum profit during the reverse movement, but the use of these strategies is associated with a large number of false entries and a very close stop loss level.

The main thing is to correctly determine the moment of entry, so oscillators are required in such a system. It is used for the purpose of diversification when trading with a trend, which provides a reduction in risk and confident profitability, but control over the load on the deposit must be strict. Usually positions are held for no more than a day.

Now let's look at strategies based on patterns.

Patterns are patterns of continuation/reversal of market movement. To complement trading strategies, or in some special cases, systems are used based on Forex patterns, which are a characteristic combination of a price model and its derivative over a period of time, which has a predictable continuation according to statistical data.

The more complex the model, the more reliable it is and the more time it takes to form it. It works best in medium- and long-term trading, since the patterns are unstable in short periods. Recommended for experienced traders.

Well, the last type of trading systems that we will consider are combined or, as they are also called, universal trading systems.

This type of strategy is considered the most reliable, since its construction is based on a combination of the various systems described above into one single system, after which a certain period of testing is necessarily carried out and used in trading.

As you already understand, in this article we examined only 5 types. Now I want to say a few words about choice.

The choice of types of trading systems comes down to the concepts of “simple-complex”, “fast-slow”. Remember: trading assets can change characteristics (correlation, volatility, peak periods) under the influence of fundamental factors and general market trends.

Almost all types of trading systems can be profitable. Each requires its own market and trading conditions, but main factor in any system - a person.

This means that the system should be simple and understandable to you personally, adapted to the trading asset and your mode of operation.