best

Proven Forex Trading Strategies That Work (for 2020)

Hey hey what's up my friend so here's

the thing right I know that there are so

many trading strategies out there

systems right and it can be overwhelming

for you as a trader in which strategies

do you trade which one do you focus on

which strategies is best for you what

are the pros and cons of all these

different strategies there are a lot of

questions you know in your head and I

understand it so that's why in today's

video I want to share with you right the

four main types of forex trading

strategies out there all right if you

look at all the systems all the

strategies it can be categorized into

one of this four categories I'll walk

you through what is it how it works the

pros and cons and how to decide you know

which strategy is best suited for you so

all this and more in today's video ready

let's get started

number one day trading so it's a day

trader right your goal here is just to

capture the intraday volatility what do

I mean by it so different markets right

each day they move in different amount

for example right now you wrote dollar

tends to move about 55 people a day for

blue chip stocks it tends to move about

1 2 percent a day so you can see at

different markets right different

instruments they have their own intraday

volatility so as a day trader of those

markets your job is just to trade to

capture the volatility of the day so if

euro dollar moves about 55 people a day

as a day trader maybe you're just trying

to capture that 20 25 pips right out of

that entire 55 tips on average that it

does for euro dollar on a single day so

that's what I mean by capturing the

intraday volatility and the way you do

it is that usually get your bias on the

higher time frame I'll explain this one

a little bit and as a day trader you

typically trade off the 20 minutes

timeframe and below and because of the

fact that you are trading on the lower

timeframe right markets tend to move

faster because every candle is painter

you know once every let's say once every

20 minutes for 30 minutes time free once

every 5 minutes

for 5 minutes time free and it's not

possible right to be trading I want 4050

markets so that's why I as a day trader

you typically focus anywhere between you

know 3 to 6 or 7 markets that's about it

that's pretty much the most that you can

handle in any one time so let me explain

you how this our this day trading

capturing the intraday volatility

by getting your bias on a higher time

frame let me show you how it works right

so let's say for example use New Zealand

Swiss franc right let's it is the daily

time frame okay and you notice that this

market let's say assume right this is

the current price section on the daily

time frame you notice that ok the higher

time frame the daily it's in a downtrend

market is at this area of resistance of

muscala R and you have multiple price

rejection right and this area of

resistance so you have a downtrend and

prices and resistance okay let's give

these two ticks so this gives you a bias

right as a day trader is that you don't

want to be long at this point in time

right because higher time frame the

price is at resistance higher time frame

the market is in a downtrend you'd want

to be long you don't we'll be buying at

this point in time and on top of it

right the market has given you clues

right that it's rejecting higher prices

look at the the wicked upper week over

here in this upper week over here so

it's a day trader right using this

information than you have right you want

to shut the markets on intraday basis so

what I'll do is that you can go down to

a lower timeframe to look for an entry

so on the 15 minutes timeframe right

let's say solemn just so what you saw

earlier on the entire time frame right

the multiple price rejection is pretty

much this whole section over here okay

so as a day trader you let's say you

look you'll notice that this market

right now is forming a build up in this

area of support

okay just giving you a example right

market is not for me build up at this

area of support so you might be thinking

okay higher time frame is in a downtrend

prices at resistance this area of

support is likely to break down so let

me look for shorting opportunities all

right maybe you can look to shut the

breakdown of this swing low that might

be one or maybe you can look for a

retest of you know a previous support

and resistance let me beat this one over

here price breakdown then you have a

retest of previous support and

resistance this could be another

opportunity to short so hopefully this

gives you an idea to how intraday trader

work right you get a bias on higher time

frame and any time your entries on the

lower timeframe and they usually get out

their trade right before the session in

before the day ends okay so this is what

our intraday trading is about right what

day trading is about at least fraud 3 or

forex markets at least

so the pros and cons right so for day

trading if you are good you can make

money on most months why is that is

because as a day trader you have ample

trading opportunities and you can be

trading anywhere between your fifty two

hundred times a month and if you have an

edge in the markets right

15200 traitor is enough for your age to

play out over time so this is why you

can make money on most months and you

have no overnight risk because you exit

all your positions right before the day

ends the downside to it is that day

trading can be stressful it is stressful

because you are watching the markets all

the time right you're glued to the

screen and you're you know always have

to having to be aware of if there any

potential news coming out anything that

could affect your trades when it's a big

trading setup coming in yeah yeah okay

and another thing to consider is that

there is high opportunity cost in day

trading right this is something that a

lot of traders neglect for example let's

say you have a 100k trading account you

make 5% a month on average in a year

there's about 60 great 60 K okay at the

same time right you could have been

working elsewhere full-time right making

about five six thousand a month that's

also about almost you know fifty sixty

thousand dollars a year similar to your

day trading and never and chances are

you're working less hours and chances

are it's less stressful okay so this is

the opportunity cost that you have as a

day trader because if you are day

trading you would fall call right an

opportunity cost of you know working

elsewhere or making an income via some

other methods right so don't forget to

take into consideration the opportunity

cost as well moving on swing trading and

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below so moving on swing trading so it's

a swing trader what you're trying to do

is to capture one swing in the market

just one move one wave just one view

just one swing right so let me just

illustrate to you what is one swing so

there are a couple of ways this can we

can work right so for example the market

is in a range so one swing could be lets

say by near the low

right in the market move up one swing

higher and exiting near the highs so

this over here from here to here is one

swing in the markets alternatively right

the market could be in a trend right

like this higher highs and higher lows

so one swing in the market could be

buying near the lows and exicting near

the highs over here and this again is

one swing now some of you might be

thinking hey Raina how do I know where

this this trending move might end right

how do I know that well I'll share with

you a technique later to how you can

actually predict right this this highs

in a trending market but later on and as

a swing trader you typically trade off

the one hour time frame in a before I

maybe the two hour or even a four hour

time frame and because you're trading

off this higher time frame you can treat

more markets because the chance right

it's only you know painted once every

four hour for example on the forward

time prick so you can train anywhere

between 20 30 40 markets it's possible

so now let me share with you right how a

swing trading looks like on a channel

how I can actually you know soak up

predict the end of the trending move in

a trending market so let's have a look

at the this bond market the ten-year so

you can see the over here or if you just

pull out the 50 ma you know that this

market is in a healthy trend market

tends to don't pull back towards the 50

ma tends to pull back to previous

previous resistance note and support and

then you know reverse from there so as a

swing trader your goal is just to

capture that one swing in this trending

market this is one swing this is one

swing this is one swing this is one

swing your goal is just to capture that

one swing right and the beauty of swing

trading is that you don't have to endure

the retracement that comes along with it

alright this retracement that comes

along with it and this retracement that

comes along with it so now how do you

how do you know right ahead of time when

this trending move is about to reverse

right like for example how do you know

it's about to reverse at this heist how

do you know it's gonna reverse at this

house okay so let me share with you a

technique you want to use a tool called

Fibonacci extension right just go to

here write Fibonacci in this case is

called the trend based feedback

extension it's a Fibonacci tool and what

you wanna do is to in an uptrend right

plot it from the swing low to the swing

high get is the swing high plot it to

the swing high and pull it back down to

the swing low okay so let me just you

Street how you throw it from the swing

low to the swing high and down to this

swing low over here again the reason why

I give you some space apart because you

want this this whole levels to be shown

so once you've done it right you want to

look right and you notice that there are

three levels right the 127 the 162 and a

2.0 okay let me explain to you how this

numbers come about so what it does right

this tool is that it calculates the

distance from this swing low to swing

high right this distance okay let's say

this distance it's uh I think layman

term you know it's what is cm right

let's say is 10 cm 10 cm I make a call

is in dollars in units whatever but

let's put it 10 cm so you know what it

means so how you get the 127 extension

it's just a 10 cm x one point two seven

two elastic ten x one point two seven

two and you get this figure over here

right this this video over here if you

just it let's say the distance here is

10 cm you multiply by let's say one six

one eight alright one six one eight

that's how you get this figure here and

10 cm x two right that's what it is -

you get this figure over here so I'm

using 10 cm as an illustration or you

can call it X can call it Y whatever so

that's how you get your figures over

here and gives you this this different

price projection so now here's the thing

right let's mention right which level do

you pay attention to so to be

conservative right to have a higher

chance of you know getting out with a

profit you want to look to target the

127 extension that's of the most

conservative measure right 127 extension

and if you want to give your tree a

little bit more Li room to run right the

one six one it is another possibility or

162 whatever you call it okay so this is

a couple of techniques that you can use

right to give you an idea to where the

trending move might potentially

end so again right let's say now you

let's see somehow you you bought this

this loss over here near the bounds of

the 50 ma what you'll do is just pick

this tool swing low again to swing high

pull it back to the swing low and in

this case alright the price actually did

I even retest back to the 2.0 level but

again there's no way to tell you know

where as you kind of reverse from the

127 the 162 or the 2.0 but generally the

more conservative approaches between 127

and 160

- right so this is a technically and you

can use try to to give you an idea to

where you can exit the trade for so

called maximum profit potential

so moving on right another example it's

this one is more of a swing trading in a

range market so if we look at this chart

right at this point in time okay notice

that this market is somewhat in a range

right between these highs and this lows

over here that market came and down into

this area of support let's say you had a

buying opportunity to go long so as a

swing trader where do you exceed the

tree well this is a little bit different

because now it's no longer a trending

market it's more of a range market and

in a range market as a swing trader you

want to exit your trade right before

opposing pressure comes in so now as

yourself where will all posing pressure

comes it where would the sellers come in

and if you look at this chart if you ask

me all right sellers could possibly come

in with in this area over here right

where previous support could become

resistance all right so this is a

possible area to look to capture one

swing in the market right so in this

case this would be your one swing right

by from this lows and exiting near this

high so they have this one this one

swing okay so that is what swing trading

is all about processing concern if you

are good you can make money on most

quarters why most quarters is because

compared to day trading swing trading

you don't get as many trading

opportunities so you need time for your

traits to play out right so again if

you're good if you have an edge in the

market you can make money on most

quarters it's possible to treat part

time because you don't have to be glued

to the screen all the time for example

if you trade off the forward timeframe

you can just check the chance right once

every four hour all right so you can

treat it part-time the cons is that you

won't be able to write trends because

remember as a swing trader you're just

gonna capture that one swing you're

gonna exit the trade before the opposite

pressure comes in before the retracement

comes in so this is why you'll never

write trends you have to embrace it and

you also have overnight risk alright so

you might be affected due to you know

news impact and stuff like that so soon

trading this is something to be aware of

moving on right position pretty all

right so what is position trading so

position trading you can think of it

it's like you know trend following

basically writing trends in the market

so just uh

sample right let's say you're writing

train is like market in a range okay

Danny breaks out trend trend trend trend

trend any reverse right so you exit

somewhere here after the market show

signs of reversal when he has hit your

trailing stop loss so this is what

position trading is all about and as a

position trader the key is to create

many markets you have to trade many

markets because there are times right

where where market is not going to Train

and if you just trade a few markets

you're gonna get stuck in those few

markets and you know suffer a lot of

whipsaw so you the more markets you

trade right now oh that's right you will

you know capture a trend so you want to

treat many markets and your time frame

is daily and above if you can do it on a

daily timeframe or even a weekly

timeframe okay so this is position tree

and the pros and cons right so before we

talk about the pros and cons right let

me just share with you an example right

so one example is the dollar against the

Chinese yen right this is a trending

market actually and it's so

statistically this is a trending market

I've done a back testing on it and you

can see that this market right actually

is in a potential accumulation stage

over here right is range then you pretty

much broke out of this resistance and it

started trending okay so you can see

that as a swing trader it's unlikely

you'll be exiting your trade anyway even

the nearly sighs I would say anyway here

or maybe somewhere here right

that's one as much a student trader

would go but as a position trader this

is where you can capture a Creek right

and one way to go about it is that you

can use a tool like let's say the

20-period moving average right exit the

trade only if the price breaks or closed

below the 20 ma which is somewhere here

so this is where position trader can

write this so-called entire trend right

the entire so-called move right now just

one move up multiple multiple moves

right in the market so this is what

position trading is all about ok so that

is right and pokemons the pros and cons

right is that it can be done in less

than an hour already

right reason being is you're trading off

the higher time frame like the daily or

even weekly you don't need much time

probably doesn't even interfere your

full time job and it's there's really

not much stress right it's either

there's a trade there's no tree or

you're just riding the train that's

pretty much it

the downside is there it's there's a low

number of trades because you don't get

trading setups often

okay and you also have to be comfortable

watching your wieners become losers

because the market could break up you're

in the money and it does a sudden

reversal back alright and becomes a fall

to break out any hits your trailing stop

loss and you get stopped up from a loss

so it's very common to what your wieners

become losers and you gotta get okay

this is the truth so that is position

trading and one more technique is what

most honest transition trading so this

is a it's something that I hesitated to

put this in because this is more of

advanced trading but still I I put it in

anyway there are four traders who have

been trading for a while now this is a

trading style that you can consider what

I call transition trading so the way

transition trading works is that again

you get your your bias on the higher

time frame you time your entries on the

lower timeframe just like a day trader

okay but if the trade right or the

market condition makes sense and the

trick goes in your favor you can

actually manage your trades on the

higher time frame I'll give you an

example later again transition trading

you typically focus only on a few

markets and you a double multiple time

frame perspective an example so if you

look at this this one over here let's

say New Zealand dollar Guinea and again

this point in time right you look at

this again it's kind of similar to the

New Zealand Swiss franc one you saw

earlier price is in a downtrend overall

a higher time frame and resistance and

multiple price rejection over here and

let's say you you know got an entry on a

lower timeframe line D let's say the

15-minute timeframe okay 15-minute time

frame let's say I don't for whatever

reason maybe you let's say you had a

shorting opportunity right let's say you

had a shorting opportunity at this

previous support right now become

resistant so you ensure when shot on

this price projection okay so let's look

in deeper okay

and also bear in mind that since you're

entering your tricks on the lower

timeframe right your stops it's also

based on the lower timeframe so let's

say you went shot over here again right

then stop-loss let's say 180 are from

this highs let's say somewhere about

here all in all your stop-loss is like

what I don't 10 12 pips right at the

same time you know that on higher time

frame market is in a downtrend and

resistance and showing multiple price

rejection this could be a move that

could you know play out really well and

let's say you went shot over here and

again

of course I picked this chap directed to

show my point of how transition trading

work and in this case the market pretty

much win in your favor I mean quite a

bit right all the way down right at the

same time right you have to be able to

swallow this so color morph against you

most probably a lot of traders will not

be able to to solo this retracement so

that's why one tip to share with you is

that as a transition trader let's say

you you shot one lot okay you don't want

to hold it one lot right and what your

equity could go up and down for a full

one long because it's it's a

rollercoaster ride right you can imagine

it at this point right maybe you're up

like you know two or three are on the

tree and market grievers you are back to

break even close to break-even so this

is why one technique that a transition

trader do is that when the market moves

one are in your favor one to one is

reward ratio it would exit may be a turn

or half the position so the remaining

half are is so called technically in the

risk free trader I could unquote

risk-free and you will let the remaining

half right for as long as possible they

will let the remaining half right manage

it using the higher time frame analysis

using higher time frame a market

structure so for example let's say you

went shot at this point okay and you

took a 1 to 1 let's say somewhere near

this swing low

you have the remaining half writing and

your remaining half rate could be

drilling in a main engine on a higher

time frame right like for example you

know that on the higher time frame price

is approaching this swing low over here

maybe you can take the last remaining

half and this this swing low over here

can you see our transition trading works

or you time your entries on a lower time

frame and if conditions permit right

market moves in your favor you can use

the higher time frame right to take

profit right and this gives you a very

favorable risk to reward on your trade

and that's what transition trading it's

all about right basically timing your

entries on a lower timeframe and

managing your traits on the higher time

frame so pros and cons right you can

achieve insane risk to reward on your

trip possibly one to ten or more and

reason being is that your your stop-loss

right is tight because your timing your

entry on the lower timeframe the

downside is that most rates will amount

to nothing right you hit your one to one

on the position for half of it and

remaining half just get stopped on and

breakeven or for loss so more streets

are just like your scratch trades right

like small wing smallest amount of

nothing but the few right are those that

really will make a huge

difference to your bottom line and

another thing is that it's mainly for

experienced traders because you can see

that you are utilizing multiple time

frames analysis you're utilizing you

know multiple time frames trading

techniques together in for example this

one is combining over day trading and

swing trading together to give you this

transition training okay so which

trading strategy should you go with

right the question is right so the first

question to ask yourself is that do you

want to grow your wealth or make an

income from trading so there's a

difference when I talk about growing

your wealth from the markets or it means

lawmaking you know 10% 15% a year right

that's growing your wealth making X

percent a year but when you talk about

making an income from trading right it

means could be you know you're looking

to make light you know three to four

percent a month or maybe a five or six

percent every quarter so you're looking

for some consistency so if you want to

grow your welfare in the markets right

you can adopt either swing opposition

trading approach but if you want to make

an income right that's where you need to

look at day trading or transition

trading okay number two how much time

can you devote to trading right if you

just crazy you want to do this full-time

think clearly right day trading it's for

you but if you are having a full time

job you don't want to do this full-time

then a you've got to look at you know

swing trading or position trading if you

want to least amount of time position

trading if you want more action in the

markets by the same time right don't

want to be glued to the screen then

swing trading and if you want to do it

full-time day trading and totally right

that's the strategy suit you so for

example position trading right I mean

it's awesome right - right big trends

but maybe you're not suited to right the

trends because you're not comfortable in

watching your winners become losers

right you feel a lot of pain right when

those winners become losers or I mean

those green become rich and if you feel

a lot of pain then you might consider

you know swing trading where you just

look to capture one swing in the markets

so again right as yourself right that's

the strategy soon you that's do you

exert a lot of mental capital do you

feel a lot of pain psychologically when

you execute a strategy if it doesn't

really hurt you if there's really not

much pain then let strategy probably is

for you but if you feel a lot of pain

that strategy clearly isn't for you

right simple so as a quick recap

today we have talked about day trading

right basically capturing the intraday

volatility we talked about swing trading

capturing a swing in the markets we've

talked about position trading writing

trends in the market and transition

trading which is a combination of you

know multiple trading stalls together

and for those of you who want to learn

more about this type of you know trading

techniques right on how you can actually

read the price section of the markets

how to better time your entries and

exits right what I want you to do is go

down to my website ok where I have a

book for you right ebook right trading

with Rainer calm scroll down alright so

depending what you want if you wanna

learn how to better time your entries

and exits reading price section download

this book over here and the ultimate

guide to price action trading if you

under learn how to write trends in the

market like position trading and trend

following is for you click this orange

button then I'll send it to your email

for free right so just go down to my

website trading with Rainer calm

download these guides is free and enjoy

so with that's it I wish you good luck

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