A well formulated and back-tested trade-by-trade strategy will keep you on track. This helps you follow your strategic rigor which will help you preserve your discipline. Investing should also help ensure that you are using the right trading strategies. A Forex trading strategy does give entry signals but also gives an entry signal. One great way to keep track is to make sure you stick to the set rules when you trade. I believe it is essential to follow a clear trading strategy and stick with it when you decide to make your trade.

Forex trading strategy means, which region a forex trader can get an entry in a trade. A trader must need to build a trading strategy, for not only trade but also do profit. Unless, not getting a profitable strategy, to be a profitable forex trader is impossible. Are you hunting for a profitable forex trading strategy? Ok, let us see-

Channel Trading Strategy

What is a channel? It is the first task if you want to work with this strategy. Channel is a technical analyzing part of trading. It’s also a chart pattern. If we want to give a definition of the channel we can say, a channel is a gradual price moving path, which is marked by two parallel angle lines. The price exists between two lines in a channel. One line connects the upper label swing high points and another line connects the lower label swing low points. Both parallel lines have to be the same length in a channel. Both lines are drawn as the trend line. The three types of channels. It’s classified according to price’s movement direction. Like a trend. Upward price’s movement directional channel is called the “ascending channel”. The downward directional price movement channel is called the “descending channel”. And range price movement is called a” “sideways” channel. It must be connected to a minimum of three or more swing highs and lows for drawing a channel by both lines.

See the picture in below of three type’s channels-

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Now we start to talk about channel trading strategy. After properly drawing a channel, it should be taken as a buy entry in the ascending channel. Sell entry in a descending channel. In a sideways channel, but could be at the lower slope and sell at the upper slope.

It is a very high probability trade to take a buy entry in an ascending channel. When a buy signal is visualized in a recent swing low point on the lower line of an ascending channel, then you can get entry to buy trade. It should be better to get this buy signal as a bullish candlestick pattern. As an example see the picture in below-

What we have seen in that picture? Price has gone up after touching the lower line of the channel when it made a bullish candlestick buy signal in a recent swing low. So it has to do with trade with this strategy like that picture. Always take a buy entry when the price touches the lower line of the ascending channel. But confirmation buy signals must be needed. Stop-loss order you can set beyond the lower line. Take the profit target set to some pips below the ascending channel’s upper line.

In this strategy, we also always get into a sell entry in a descending channel.

Take a sell entry, when the price touches the upper line of the descending channel, in a recent swing high. Be sure by a candlestick bearish signal in swing high point for sell entry.

See the picture in below for example-

What we have seen in that picture? The price goes down after touching the upper line, and it has happened when a candlestick sell signal creates.  Stop-loss order set beyond the upper line of the descending channel. Tp set some pips above the lower line of the descending channel.

In the sideways channel buy at the lower slope of the sideways channel, sell at the higher slope of the sideways channel, after confirmation candlestick buy-sell signal. In buy, trade set the sl beyond

The lower label of the sideways channel and set the top some pips below the upper label of the sideways channel. In the sell trade set, the sl beyond the upper label of the sideways channel set the tp some pips above the lower label of the sideways channel.

Support Resistance Breakout Forex Trading Strategy

Break out trading is a widely accepted and very proven profitable trading strategy. A trader can catch a big movement and also get in a trend when just it has started.

What is breaking out? Need some discussion. When the market’s price is able to break through any technical label, any range, any consolidation period, any pattern, then it calls a breakout. Support resistance breaks out as the number one break-out item. How can I work with this strategy? If we want to trade with this strategy we must have to know how to mark support resistance properly. In broken support, we have to take a sell entry, and in broken resistance, we have to take a buy entry in this strategy.

As the sell trade entry has to take at broken support, we just need to identify the broken support label. We know which price label the buyer enters the market and price bounce back to go up, this label calls the support label. But when a supporting label has broken through it becomes new resistance. It’s a common theory old support becomes new resistance and old resistance becomes support. So when a supporting label breaks through it becomes resistant. We know to buy on support, sell on resistance. And we also try to sell the broken support which now acts as new resistance. For trading with this broken support label’s sell entry at first, we just have to draw the recent support label accurately. It must be drawn running a price bar-related support label. After marking the recent support label we need confirmation of its break. How do we ensure the full break out of the support label? First, we need to know about the support label area’s boundary. How long does the support label belong? For demarcation of the support area’s limit, we can see the recent swing lows price candle, which has gone to heist low price. This candle heist low price is the actual last range of a supporting label. So for break out support, when the breaking price candle is able to cross over the swing lows heist low price going candle’s price, then we consider as the support has broken out. The support breaking candle must be closed in our area of the support label area. Being sure that the support label is just broken through, we should not enter a sell entry. We need more confirmation signals of support break out. Because it could be a false break of support and price again returns back into the support area. So we need more confirmation of the sell signal for entry into sell trade.

When we get satisfaction about break-out confirmation, then we need a bearish candlestick sell signal, if we get a sell signal we can enter for a sell trade.

For example, see the picture below

In the picture, we have seen price break through the support label by a bearish candle. After that, we see another confirmation candle that has closed out of the support label. And the price starts to go down. In this trade, we set the stop loss (sl) order some pips above the previously broken support label. And set the take profit order (tp) next upcoming support label.

We have to take the buy entry in the broken resistance. When a bullish candle breaks through the resistance label and the candle has closed out of the resistance area, then it has to be taken as resistance breaks out. We also need another confirmation candle to ensure resistance breaks out. After confirmation, if we get a bullish candle signal then we can take entry for a buy trade.

For example, see the picture below

We have seen in that picture, the bullish candle breaks through the resistance and closes up beyond the resistance. Price starts to go up after confirmation. Set stop loss (sl) order some inner side of previously broken resistance. Set take profit (TP) order to the next upcoming resistance label.

Conclusion

No forex trading strategy in the world can work as a hundred percent. Although, this forex trading strategy has very high probabilities, and maximum times winning strategy. But you must need to do money management with this strategy. It can ensure your trading success.