There are many advanced forex trading strategies that a professional trader can follow. However, understanding a strategy and matching it with your trading psychology is essential. In this article, we will see the top 5 advanced forex trading strategies in 2020.
29 May, 2020 | AtoZ Markets – A Forex trading strategies for advanced traders is a system that requires a lot of knowledge and experience to define when to buy or sell a currency pair. There are many advanced forex trading strategies, including technical analysis or fundamental analysis. However, a suitable strategy allows a trader to execute trades with a proper management technique. As we know, the forex trading strategies can be divided into organizational structure or individual. In the following section, we will see the retail part only.
Professional forex traders require several factors to formulate a strategy. There are many strategies that a trader can follow. However, understanding them and develop a trading strategy is essential. Every trader has a unique thinking style for picking advanced forex trading strategies plus the forex broker with an impressive profile that can be filtered out with the help of tradingpedia brokers.
In the following section, we will see the top 5 advanced forex trading strategies in 2020. Many advanced and successful forex traders earn a lot of money by using these strategies.
Advanced Forex Trading Strategies for Pro Traders
As we know, there are a lot of forex trading strategies available on the internet. Moreover, many strategies require a minimum investment that is not suitable for most of the traders. Therefore, we will consider advanced trading strategies that are easy to understand, and that will assure you of profit without much hassle. Here is the list of top 5 advanced forex trading strategies in 2020:
- Price Action with Context
- Ichimoku Cloud Trading Strategy
- Order Block Trading Strategy
- Scalping Trading Strategy
- Triangular Arbitrage Trading Strategy
Let’s have a look at one of them.
1. Price Action with Context
Price action is a trading strategy that follows the footprint of prominent investors and traders. The forex market is run by big central banks and financial institutes, following them makes the thing easy and profitable for traders.
But what is the market context?
Market context is a characteristic of a trend. The element of the market context is mentioned below:
- Impulse- It happens when the market moves with power and creates new highs and lows that are almost easy to see.
- Correction- Correction happens after the impulse due to profit-taking by investors. After completing a correction, the market is likely to move towards the direction set earlier.
- Volatility- When the market becomes indecisive buyers and sellers fail to indicate a solid direction. In this situation, most of the moves are covered by the counterparty, and no stable path is set.
- Non-volatility- In a non-volatile market structure, buyers or sellers dominate the market, and it moves towards a specific direction.
Moreover, the price action strategy consists of the market trend, price pattern, Fibonacci, candlestick pattern, etc. Overall, price action is not a specific rule. Many traders use it in many ways, but the core concept is almost the same.
2. Ichimoku Cloud Trading Strategy
Ichimoku Kinko Hyo is an indicator that is available free on most of the trading platform. Despite being an indicator, it is a complete trading strategy.
The element of Ichimoku Kinko Hyo is mentioned below:
- Kumo Cloud- It is a zone, which works as a potential support or resistance zone. The Kumo cloud consists of Senkou Span A and Senkou Span B. If the market is above the Kumo cloud, the overall momentum is bullish, while if the price moves below the Kumo cloud, the momentum shifts to the bearish zone.
- Tenkan Sen and Kijun Sen- this two-part of the Ichimoku Kinko Hyo indicator works as a dynamic support and resistance level. On a continuation of a trend, any rejection towards the trend from Tenkan sen or Kijun sen indicates a potential trend continuation of price.
- Chinkou Span- it is the average price of the last 26 candles. According to the Ichimoku theory, this part works as a cycle. Therefore, when the market faces this level, the price is likely to face resistance or support.
3. Order Block Trading Strategy
The order block trading strategy is one of the advanced forex trading strategies in 2020. There are many banks and institutional traders use this strategy to read the market.
But what is an order block?
Order block is a zone or area of a price where the price settled before starting an impulsive momentum. In an order block, big players usually accumulate orders and prepare to set a movement. For a retail trader, they have to identify their footprint by reading order block and follow them, according to this trading strategy.
Besides the order block, order flow is another common term in this trading strategy. Order flow is the continuation of the price based on the previous order block.
For example, if a trader wants to trade on an hourly order block, he should follow the trade only order flows from a daily or weekly time frame.
The trading strategy is the price breaks out the order block with impulsive pressure, and before moving further, it comes to the zone to test. The trading entry appears when the price comes to check the level and reject it.
4. Scalping Trading Strategy
It is pretty strange to see scalping in the list of top 5 advanced forex trading strategies. However, it is true. Most of the successful forex traders are scalpers, and they earn a lot of money by doing scalping only.
The significant difference between advanced scalping and ordinary scalping is that the advanced scalping strategy considered a top-bottom analysis.
What is top-bottom analysis?
For example, you want to do scalping in the 5-minute timeframe. But before moving to the 5 minutes, you should read the market form daily, then H4, H1, and in the last 5 minutes. The top-bottom means it is crucial to see what the higher timeframe traders are doing in the market. As we know, institutional traders usually trade in a higher timeframe. It provides better accuracy. Therefore, the lower timeframe traders should match the trading activity with them to increase the probability.
5. Triangular Arbitrage Trading Strategy
Triangular arbitrage is an advanced forex trading strategy that is used by professional cross rate traders. This trading strategy includes three continuous transactions in three different currency pairs. If you can do it successfully, you can make a locked-in profit with a net flat position.
However, it would help if you kept in mind that no trading strategy and technique can guarantee you a hundred percent success. Every trading system has prone to losses, and all of them involved risks.
To be successful in the industry, every trader should have a trading strategy, and they need to follow it accordingly. However, the trading system is just a part of overall success in this system. The next challenge is to implement a trading strategy accurately. Moreover, to minimize the risk, traders should follow a money management system that has a good track record.
Think we have missed something? Let us know in the comment section below!