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3 Simple Profitable Forex Trading Strategy 

 February 8, 2023

By  Advanced Strategies

3 Simple Forex Trading Strategies
3 Simple Forex Trading Strategies

3 Simple Profitable Forex Trading Strategy

In the forex market, there are countless trading strategies that you can use to make a profit. But not all of them are created equal. In this blog post, we will explore three simple forex trading strategies that are profitable and easy to use. The first strategy is called “scalping.” Scalping is a short-term strategy that involves taking small profits on a regular basis.

This strategy is best used when the market is moving in a clear direction. The second strategy is called “swing trading.” Swing trading involves holding onto a currency for a period of time in order to take advantage of market swings. This strategy is best used when the market is volatile and there are opportunities to make large profits. The third and final strategy is called “position trading.”

Position trading involves taking a long-term view of the market and holding onto a currency for an extended period of time. This strategy is best used when you have a strong conviction about where the market is headed and you want to ride out the trend. So, if you’re looking for simple and profitable forex trading strategies, be sure to check out scalping, swing trading, and

Simple Profitable Forex Trading Strategy

If you are looking for a simple and profitable Forex trading strategy, then look no further. This strategy is based on two indicators, the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI).

The MACD is a momentum indicator that measures the difference between two moving averages. The RSI is an oscillator that measures the strength of a trend. When the MACD crosses above the RSI, it signals that the market is in an uptrend. When the MACD crosses below the RSI, it signals that the market is in a downtrend.

This strategy can be used on any time frame from 5 minutes up to Daily charts. However, I prefer to use it on 4 hour or daily charts because it gives me more time to enter and exit trades.

Here’s how this simple Forex trading strategy works:

1) Wait for the MACD histogram to cross above or below the zero line. This indicates that a new trend has started.

2) Enter your trade in the direction of the new trend. Place your stop loss just below/above recent swing high/low.

3) Exit your trade when you see MACD histogram start to reverse back towards the zero line or when RSI reaches overbought/oversold territory.

This is a very simple Forex trading strategy but it can be quite profitable if used correctly.

Moving Average crossover
Moving Average crossover

Moving Average crossover

The moving average crossover is a simple yet effective trading strategy. It is based on the idea that when two moving averages cross over each other, it signals a potential change in trend.

There are many different ways to use this strategy, but the most common and simplest is to buy when the shorter-term moving average crosses above the longer-term moving average, and sell when the shorter-term moving average crosses below the longer-term moving average.

This strategy can be used on any timeframe from intraday charts up to weekly charts, and can be applied to any currency pair.

One of the main advantages of this strategy is that it is very easy to implement and understand. Another advantage is that it can be used as part of a larger trading system or method.

Moving Average Crossover Buy Rule:

  1. Identify two Moving Averages, a fast MA (e.g. 10-day MA) and a slow MA (e.g. 50-day MA).
  2. Confirm a bullish crossover when the fast MA crosses above the slow MA.
  3. Enter a long position at the next candlestick’s opening price.

Moving Average Crossover Sell Rule:

  1. Identify two Moving Averages, a fast MA (e.g. 10-day MA) and a slow MA (e.g. 50-day MA).
  2. Confirm a bearish crossover when the fast MA crosses below the slow MA.
  3. Enter a short position at the next candlestick’s opening price.

Stop Loss Rule:

  1. Place the stop loss a few pips below/above the low/high of the last few candles for long/short positions respectively.
  2. If the market doesn’t move in the expected direction, the stop loss will be triggered and the trade will be closed to minimize potential losses.
Pin Bar Trading Strategy
Pin Bar Trading Strategy

Pin Bar Trading Strategy

The pin bar trading strategy is one of the most powerful and easy to use Forex trading strategies.

The pin bar is a candlestick pattern that consists of a long upper wick and a small lower body. The long upper wick shows that the sellers were unable to push the price lower and the small lower body shows that the buyers were unable to push the price higher.

This price action reversal setup is used to trade market reversals and can be traded on any timeframe from intraday charts up to weekly charts.

To trade the pin bar reversal, simply place a buy order when the candle closes above the high of the pin bar or a sell order when the candle closes below the low of the pin bar. If you are not sure where to place your stop loss, you can use a trailing stop loss or set your stop loss at half of the distance between your entry point and target profit level.

Pin Bar Trading Strategy Buy Rule:

  1. Identify a Pin Bar formation on the chart, characterized by a long wick and a small body.
  2. Confirm the Pin Bar with a bullish reversal candlestick pattern.
  3. Enter a long position at the next candlestick’s opening price with a buy stop order.

Pin Bar Trading Strategy Sell Rule:

  1. Identify a Pin Bar formation on the chart, characterized by a long wick and a small body.
  2. Confirm the Pin Bar with a bearish reversal candlestick pattern.
  3. Enter a short position at the next candlestick’s opening price with a sell stop order.

Stop Loss Rule:

  1. Place the stop loss a few pips below/above the Pin Bar’s tail (long wick) for long/short positions respectively.
  2. Adjust the stop loss as the market moves in your favor to lock in profits and minimize potential losses.
Forex Breakout Strategy
Forex Breakout Strategy

Forex Breakout Strategy

A breakout is when the price of a currency pair moves above or below a key level, which can be a resistance or support level, or a trend line. This move usually happens during high market volatility and signals a change in trend.

There are two types of breakouts: false breakouts and true breakouts. A false breakout is when the price breaks out of a key level but then quickly reverses and heads back in the opposite direction. A true breakout is when the price breaks out of a key level and continues in that direction for some time.

The best way to trade a breakout is to wait for confirmation before entering into a trade. Some traders like to use candlestick patterns, such as the engulfing pattern, to confirm that a breakout is happening. Other traders use technical indicators, such as the Relative Strength Index (RSI), to confirm that a breakout is happening.

Once you have confirmation that a breakout is happening, you can enter into a trade by buying or selling the currency pair. If you think the breakout will continue in the same direction, you can place a stop loss just below the key level that was broken. If you think the breakout will reverse, you can place a stop loss just above the key level that was broken.

Forex Breakout Strategy Buy Rule:

  1. Identify a key resistance level on the chart.
  2. Confirm the breakout by observing a strong increase in volume and price breaking above the resistance level.
  3. Enter a long position at the next candlestick’s opening price with a buy stop order placed above the resistance level.

Forex Breakout Strategy Sell Rule:

  1. Identify a key support level on the chart.
  2. Confirm the breakout by observing a strong increase in volume and price breaking below the support level.
  3. Enter a short position at the next candlestick’s opening price with a sell stop order placed below the support level.

Stop Loss Rule:

  1. Place the stop loss a few pips below/above the resistance/support level for long/short positions respectively.
  2. If the market doesn’t move in the expected direction, the stop loss will be triggered and the trade will be closed to minimize potential losses.

Final Thoughts

After reading this article, it is our hope that you have a better understanding of what it takes to be a successful forex trader. We have covered all the key elements of a successful trading strategy, from entry and exit points to risk management and position sizing.

We have also discussed the importance of keeping your emotions in check, as well as the need to stay up-to-date on market news and economic developments. Ultimately, it is important to remember that trading is a skill that requires practice and dedication. With the right attitude and mindset, you can make consistent returns from forex trading over time.

Simple Profitable Forex Trading Strategy Top FAQ

1. What is a simple Forex trading strategy? 
A simple Forex trading strategy is a method of trading the Forex market that utilizes a limited number of indicators or tools to generate trades. The goal is to keep the strategy straightforward and easy to understand and execute.

2. What are some popular simple Forex trading strategies? 
Some popular simple Forex trading strategies include the Moving Average Crossover, Breakout, and Pin Bar strategies.

3. How does the Moving Average Crossover strategy work?
The Moving Average Crossover strategy uses two Moving Averages, one fast and one slow, to identify trend changes in the market. A bullish crossover occurs when the fast MA crosses above the slow MA, signaling a potential long trade, while a bearish crossover occurs when the fast MA crosses below the slow MA, signaling a potential short trade.

4. How does the Breakout strategy work?
The Breakout strategy looks to enter trades when the price breaks out of a key support or resistance level. A long trade is entered when price breaks above resistance, while a short trade is entered when price breaks below support.

5. How does the Pin Bar strategy work?
The Pin Bar strategy looks to enter trades based on the formation of a Pin Bar pattern on the chart. A Pin Bar is a candlestick with a long tail and small body, signaling a potential reversal. The trader enters a long trade when a bullish reversal pattern confirms the Pin Bar, while a short trade is entered when a bearish reversal pattern confirms the Pin Bar.

6. What is the risk management aspect of simple Forex trading strategies?
Risk management is an important aspect of any Forex trading strategy, simple or complex. Strategies such as the Moving Average Crossover, Breakout, and Pin Bar typically utilize stop loss orders to limit potential losses.

7. What is a stop loss order and how does it work?
A stop loss order is an order to sell a security once it reaches a certain price, designed to limit potential losses. When the market reaches the stop loss price, the trade is automatically closed to minimize potential losses.

8. How do you determine the placement of a stop loss order?
The placement of a stop loss order depends on the strategy being used and market conditions. For example, in the Pin Bar strategy, the stop loss may be placed a few pips below/above the Pin Bar’s tail for long/short positions respectively.

9. What are the key elements to consider when using simple Forex trading strategies?
When using simple Forex trading strategies, it’s important to consider market conditions, fundamentals, and overall market sentiment. Technical analysis is also important, as well as risk management techniques such as stop loss orders.

10. What are the advantages of using simple Forex trading strategies?
The advantages of using simple Forex trading strategies include their ease of use and understandability, as well as their ability to be executed quickly. Simple strategies also typically require less time and effort to manage than complex strategies.

11. What are the disadvantages of using simple Forex trading strategies?
The disadvantages of using simple Forex trading strategies include their limited ability to adapt to changing market conditions and their lack of precision in certain market conditions. Simple strategies may also have limited profit potential compared to more complex strategies.

12. How do you evaluate the success of a simple Forex trading strategy?
The success of a simple Forex trading strategy can be evaluated by looking at factors such as profitability, consistency, and overall risk management. A strategy that generates consistent profits and manages risk effectively can be considered successful.

13. What are the important skills for a Forex trader using simple Forex trading strategies?
Important skills for a Forex trader using simple Forex trading strategies include technical analysis, risk management, discipline, and patience. A strong understanding of the strategy being used and market conditions is also important.

14. What is the role of discipline in simple Forex trading strategies?
Discipline is an important aspect of any Forex trading strategy, including simple Forex trading strategies. A trader must have discipline to stick to their strategy, even in the face of losing trades or volatile market conditions.

15. What is the role of patience in simple Forex trading strategies?
Patience is an important aspect of any Forex trading strategy, including simple Forex trading strategies. Simple strategies may not generate profits right away, and a trader must have patience to wait for the right conditions to enter trades and generate profits.


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