Focusing on weekly charts avoids this predatory behavior by aligning entry, exit and stop losses with the edges of longer-term uptrends , downtrends , support and resistance. This big picture approach lowers noise levels considerably, allowing the weekly trader to see opportunities that are missed by short-term players flipping through their daily charts at night. Admittedly, these trade setups require patience and self discipline because it can take several months for weekly price bars to reach actionable trigger points.

However, higher reward potential makes up for this lower activity level, while total work effort allows the trader to have a real life away from the financial markets. Weekly charts utilize specific risk management rules to avoid getting caught in big losses:.

Feel free to add fundamental techniques to your weekly technical trade criteria. For example, solid earnings growth will increase your confidence when buying a stock that is nearing a weekly support level after a sell-off. Moreover, dollar cost averaging can be utilized aggressively, adding to positions as they approach and test these action levels. The fund entered a weekly trading range , with support near 85 in November It rallied above 90 at the start of and sold off, returning to long-term range support in April.

Weekly traders could build low-risk positions at that level 1 , ahead of a 7-week bounce that added more than 7 points. In addition, a second buy signal erupted when it rallied above January resistance 2 , favoring a new entry or continuation of the first position, which is now held at a substantial profit.

The steep October slide set up a third weekly trade entry when it descended to support above 91 3 , created by the June breakout. That level also aligned perfectly with support at the week moving average , significantly raising odds for a bullish outcome.

A final buy signal goes off when it breaks out into triple digits in November 4. April and October pullbacks into weekly support red circles raise an important issue in the execution of weekly trades. While positions should be taken as close to weekly support as possible, stops and other unprofitable exits need to avoid intraday volatility, which means one should defer exit decisions until the weekend or until support is breached by several percentage points.

Trading Skills. Day Trading. Technical Analysis Basic Education. Company News Markets News Cryptocurrency News Personal Finance News Economic News Government News. Your Money. Personal Finance. Your Practice. Popular Courses. Table of Contents Expand. Table of Contents. The Big Picture Approach. Using Weekly Charts. A Historical Example. Trading Strategies Beginners.

Weekly Forex trading strategies are based on lower position sizes and avoiding excessive risks. For this strategy, traders can use the most commonly used price action trading patterns such as engulfing candles, haramis and hammers. One of the most commonly used patterns in Forex trading is the hammer which looks like the image below:. The chart below shows the weekly price action of NZDUSD and examples of the patterns shown above.

Source: Admirals MetaTrader 4, NZDUSD, Weekly chart between 19 August to 31 May Accessed: 27 April at pm BST - Please note: Past performance is not a reliable indicator of future results or future performance. To what extent fundamentals are used varies from trader to trader. At the same time, the best Forex strategy will invariably use price action.

This is also known as technical analysis. When it comes to technical currency trading strategies, there are two main styles: trend following and countertrend trading. Both of these FX trading strategies try to profit by recognising and exploiting price patterns.

When it comes to price patterns, the most important concepts include support and resistance. Put simply, these terms represent the tendency of a market to bounce back from previous lows and highs. This occurs because market participants tend to judge subsequent prices against recent highs and lows. Therefore, recent highs and lows are the yardsticks by which current prices are evaluated.

There is also a self-fulfilling aspect to support and resistance levels. This happens because market participants anticipate certain price action at these points and act accordingly.

As a result, their actions can contribute to the market behaving as they had expected. Did you know that you can see live technical and fundamental analysis in the Admirals Trading Spotlight webinar?

In these FREE live sessions, taken three times a week, professional traders will show you a wide variety of technical and fundamental analysis trading techniques you can use to identify common chart patterns and trading opportunities in a variety of different markets. Sometimes a market breaks out of a range, moving below the support or above the resistance to start a trend.

How does this happen? When support breaks down and a market moves to new lows, buyers begin to hold off. This is because buyers are constantly noticing cheaper prices being established and want to wait for a bottom to be reached. At the same time, there will be traders who are selling in panic or simply being forced out of their positions or building short positions because they believe it can go lower.

The trend continues until the selling is depleted and belief starts to return to buyers when it is established that the prices will not decline further. Trend-following strategies encourage traders to buy the market once it has broken through resistance and sell a market once they have fallen through support.

In addition, trends can be dramatic and prolonged, too. Because of the magnitude of moves involved, this type of system has the potential to be the most successful Forex trading strategy.

Trend-following systems use indicators to inform traders when a new trend may have begun, but there's no sure-fire way to know of course. Here's the good news: If the indicator can establish a time when there's an improved chance that a trend has begun, you are tilting the odds in your favour to use the best Forex trading system. The indication that a trend might be forming is called a breakout. A breakout is when the price moves beyond the highest high or the lowest low for a specified number of days.

For example A day breakout to the upside is when the price goes above the highest high of the last 20 days. Trend-following systems require a particular mindset, because of the long duration - during which time profits can disappear as the market swings.

These trades can be more psychologically demanding. When markets are volatile, trends will tend to be more disguised and price swings will be greater. Therefore, a trend-following system is the best trading strategy for Forex markets that are quiet and trending. A good example of a simple trend-following strategy is a Donchian Trend system.

Donchian channels were invented by futures trader Richard Donchian , and is an indicator of trends being established. The Donchian channel parameters can be tweaked as you see fit, but for this example, we will look at a day breakout. Source: Admirals MetaTrader 4, EURJPY, Daily chart between 18 September to 31 May You can get the Donchian Channel indicator completely FREE in the Admirals Supreme Edition package. It's called Admiral Donchian. To upgrade your MetaTrader platform to the Supreme Edition simply click on the banner below:.

There is an additional rule for trading when the market state is more favourable to the Forex trading system. This rule is designed to filter out breakouts that go against the long-term trend. In short, you look at the day moving average MA and the day moving average.

The direction of the shorter moving average determines the direction that is permitted. This rule states that you can only go:. Trades are exited in a similar way to entry, but only using a day breakout. This means that if you open a long position and the market goes below the low of the prior 10 days, you might want to sell to exit the trade and vice versa.

Now let's look at another system that could be the best trading strategy for you. One potentially beneficial and profitable Forex trading strategy is the 4-hour trend following strategy which can also be used as a swing trading strategy.

This strategy uses a 4-hour base chart to screen for potential trading signal locations. The 1-hour chart is used as the signal chart, to determine where the actual positions will be taken. Always remember that the time frame for the signal chart should be at least an hour lower than the base chart. For this Forex strategy, two sets of moving average lines are chosen for the best results. One will be the period MA, while the other is the period MA. To ascertain whether a trend is worth trading, the MA lines will need to relate to the price action.

The MA lines will be a support zone during uptrends, and there will be resistance zones during downtrends. It is inside and around this zone that the best positions for the trend trading strategy can be found. Below is a daily chart of GBPUSD showing the exponential moving average purple line and the exponential moving average red line on the chart:. Source: Admirals MetaTrader 4, GBPUSD, Daily chart between 4 September to 31 May Counter-trend strategies rely on the fact that most breakouts do not develop into long-term trends.

Therefore, a trader using such a strategy seeks to gain an edge from the tendency of prices to bounce off previously established highs and lows. On paper, counter-trend strategies can be one of the best Forex trading strategies for building confidence, because they have a high success ratio. However, it's important to note that tight reins are needed on the risk management side.

These Forex trading strategies rely on support and resistance levels holding. But there is also a risk of large downsides when these levels break down. Constant monitoring of the market is a good idea. The market state that best suits this type of strategy is stable and volatile. This sort of market environment offers healthy price swings that are constrained within a range.

It's important to note that the market can switch states. For example, a stable and quiet market might begin to trend, while remaining stable, then become volatile as the trend develops. How the state of a market might change is uncertain. You should be looking for evidence of what the current state is, to inform you whether it suits your trading style or not and should be one of the Forex strategies you should be using. Source: Admirals Demo Account Example.

Many types of technical indicators have been developed over the years. The great leaps made forward with online trading technologies have made it much more accessible for individuals to construct their own indicators and systems, as we've gone through in these trading strategy guides.

You can read more about technical indicators by checking out our education section or through the trading platforms we offer. The best Forex trading strategies for beginners are the simple, well-established strategies that have worked for a huge list of successful Forex traders already. Of course, many newcomers to Forex trading will ask the question: Can you get rich by trading Forex?

or: What is the best Forex strategy that always wins? It's important to understand that trading is about winning and losing and that there is always risk involved. In some cases, you could lose more than your initial investment on a trade.

There are no easy Forex trading strategies which are going to make you rich overnight, so do not believe any false headlines promising you this. Trading Forex is not a 'get rich quick' scheme. However, through trial and error and the use of a demo trading account, you can learn about the Forex market and yourself to find a suitable style.

It can also help you understand the risks of trading before making the transition to a live account. Traders that choose Admirals will be pleased to know that you can trade in a virtual environment by opening a demo trading account. Instead of heading straight to the live markets and putting your capital at risk, you can practice your Forex trading strategies on a FREE demo account.

This is a great way to help you find the best trading strategy for yourself and the trading strategies that will help you become successful. You can open a FREE demo trading account in just a few minutes and access a range of additional trading indicators and software complimentary. Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8, financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5.

Start trading today! This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time.

Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. Help center Contact us. Start Trading. Trading Tools MetaTrader Supreme Edition StereoTrader Top!

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You do not need to be glued to your trading screen to take advantage of the strategies used by top market players to profit from stocks, futures and forex. Start with a giant step back, setting your focus on weekly patterns that carve out more reliable highs and lows than daily or intraday price action does. Then, build management rules that allow you to sleep at night, while the fast fingered crowd tosses and turns, fixated on the next opening bell.

Algorithms , also known as high-frequency trading HFT robots, have added considerable danger to intraday sessions in recent years, jamming prices higher and lower to ferret out volume clusters, stop losses and inflection points where human traders will make poor decisions. Focusing on weekly charts avoids this predatory behavior by aligning entry, exit and stop losses with the edges of longer-term uptrends , downtrends , support and resistance.

This big picture approach lowers noise levels considerably, allowing the weekly trader to see opportunities that are missed by short-term players flipping through their daily charts at night. Admittedly, these trade setups require patience and self discipline because it can take several months for weekly price bars to reach actionable trigger points.

However, higher reward potential makes up for this lower activity level, while total work effort allows the trader to have a real life away from the financial markets.

Weekly charts utilize specific risk management rules to avoid getting caught in big losses:. Feel free to add fundamental techniques to your weekly technical trade criteria. For example, solid earnings growth will increase your confidence when buying a stock that is nearing a weekly support level after a sell-off. Moreover, dollar cost averaging can be utilized aggressively, adding to positions as they approach and test these action levels.

The fund entered a weekly trading range , with support near 85 in November It rallied above 90 at the start of and sold off, returning to long-term range support in April. Weekly traders could build low-risk positions at that level 1 , ahead of a 7-week bounce that added more than 7 points.

In addition, a second buy signal erupted when it rallied above January resistance 2 , favoring a new entry or continuation of the first position, which is now held at a substantial profit. The steep October slide set up a third weekly trade entry when it descended to support above 91 3 , created by the June breakout. That level also aligned perfectly with support at the week moving average , significantly raising odds for a bullish outcome.

A final buy signal goes off when it breaks out into triple digits in November 4. April and October pullbacks into weekly support red circles raise an important issue in the execution of weekly trades.

While positions should be taken as close to weekly support as possible, stops and other unprofitable exits need to avoid intraday volatility, which means one should defer exit decisions until the weekend or until support is breached by several percentage points. Trading Skills. Day Trading. Technical Analysis Basic Education.

Company News Markets News Cryptocurrency News Personal Finance News Economic News Government News. Your Money. Personal Finance. Your Practice. Popular Courses. Table of Contents Expand. Table of Contents. The Big Picture Approach. Using Weekly Charts. A Historical Example. Trading Strategies Beginners. Compare Accounts. Advertiser Disclosure ×. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear.

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Beginners Top Strategies for Perfecting Pullback Trading. Partner Links. Related Terms. The Ascending Triangle Pattern: What It Is, How To Trade It An ascending triangle is a chart pattern used in technical analysis created by a horizontal and rising trendline. The pattern is considered a continuation pattern, with the breakout from the pattern typically occurring in the direction of the overall trend. Pullback: What It Means in Trading, With Examples A pullback refers to the falling back of a price of a stock or commodity from its recent pricing peak.

Cup and Handle Pattern: How to Trade and Target with an Example A cup and handle is a bullish technical price pattern that appears in the shape of a handled cup on a price chart. Learn how it works with an example, how to identify a target. Setup Price A setup price is an investor's predetermined point of entry that, once breached, initiates a position in that specific security. Swing Trading: What It Is and the Pros and Cons for Investors Swing trading is an attempt to capture gains in an asset over a few days to several weeks.

Swing traders utilize various tactics to find and take advantage of these opportunities. Trend Trading Trend trading is a style of trading that attempts to capture gains when the price of an asset is moving in a sustained direction called a trend. Facebook Instagram LinkedIn Newsletter Twitter. About Us Terms of Use Dictionary Editorial Policy Advertise News Privacy Policy Contact Us Careers California Privacy Notice.

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These trades can be more psychologically demanding. But it all happens in the more significant and consistent rising trend. Everything else stays the same. Should You Use Only One Time Frame in Forex Trading? A breakout is when the price moves beyond the highest high or the lowest low for a specified number of days. Please share this via Twitter and let me know on social media what your thoughts are on the weekly trades I pointed out.

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