Beginner traders in the Forex market are faced with a lot of new information, which can take from several weeks to several months to digest. Usually they want to trade right now, but understanding of trading strategies' subtleties comes much later. Despite the assurance of the classics that the trading system must be as simple as possible, and its rules should fit on a small piece of paper, some are not looking for easy ways and begin to implement complex
algorithms in trading.
In fact, it is necessary to use elementary forex strategies for beginner traders which consist of a couple of indicators and you do not need to spend hours studying the chart to get a signal. Let's look at examples of simple trading systems that are ideal as a first trading algorithm for beginner traders.
Trading with the "Turtle" system does not require knowledge of the rules of technical analysis and searching for fundamental relationships between currency pairs. All a trader needs to do is to open the daily chart of any Major financial instrument and identify the boundary levels in the range of the pair's movement over a 20-day period. Trading rules of the simplest Forex strategy for beginners are simple.
The signal to buy a financial asset occurs if the current price is above the upper level. The same is true for selling. It is possible to sell a pair if the price of the asset is below the trading corridor. An example of how the "Turtle" trading strategy works can be seen in the figure below.
The red vertical lines on the chart show the range of the currency pair movement over 20 days. Horizontal lines indicate its upper and lower limits. Immediately after the end of the 20-day period, the price was inside the trading band. At this time it is not advisable to trade, because there is no understanding of where the price will go next. In this example, we should sell the pair after the price has broken through the lower boundary of the band. تحميل مشغل فيديو للكمبيوتر
As we can see from the example, the price has been consolidating on the lower line for three days, which is a good sign. It proves that the currency pair is going to keep falling down, which has happened in practice. After breaking through the lower boundary of the corridor, the pair could have brought the trader 125 pips of profit if the trade had been executed.
One of the simple Forex strategies for beginners, which does not lose its popularity, is a system based on moving averages crossover. This indicator is a part of a standard set of almost any trading platform. Averages (MovingAverage) represent an average of closing, opening, etc. prices. (method of drawing should be chosen in the indicator settings) for a certain period , check
Usually two moving averages are used for trading - slow and fast. The period of the first one is longer than that of the second one, and the periods should differ at least by half. For each timeframe it is necessary to select the periods. شاشات اعلانات الشوارع للبيع
The averages are the trend indicator. Their direction shows the direction of the current trend. Their intersection means a change in the trend. Exactly this is to be used for entering the transaction. It is necessary to open an order to buy the currency pair, when the slow average with a smaller period crosses the fast one with a bigger period. It is necessary to sell the pair in case of coincidence of opposite conditions. The slow moving average is above the fast one and crosses it, but from the top downward. You can see an example of the strategy in the image below.
The yellow curve is a 5 period moving average (fast moving average). The red curve is an average with a period of 14.
It should be remembered that the MovingAverage indicator works well only during the trend periods. During a flat, the program shows failure and can bring losses. Therefore, it is necessary to determine the phase of the market even at the preliminary analysis stage. An experienced trader can see the trend with the naked eye.
The method for determining the trend in a Forex strategy for beginners is simple. It is necessary to connect the maximum and minimum points of price movements of a financial instrument for a certain period, the width of which should be at least 24 candles. If the obtained line is directed downwards - the market is in a downtrend. The upward direction of the line indicates an uptrend. It is not worth trading using the trading system with crossover averages if the obtained level is practically horizontal. The price of the financial asset is in a sideways corridor, so the trend indicators will not work.
When choosing a trading system at the initial stage of acquaintance with trading, there are several principles to follow:
It should be simple. Strategies with many indicators or graphical drawings should be avoided.
It should contain recommendations on currency pairs, timeframe and risk management, which are most suitable for trading on this algorithm. This is a necessary minimum, the presence of which is mandatory.
Do not settle on a system that has no justification for each action. Do not work with algorithms that propose to open orders on the arrows or repainting lines.
A typical beginner's forex strategy is a set of rules taken from various trading strategies. Often novice traders trade according to their intuition without following any principles at all. Both ways are wrong and lead to defeat on Forex market. Nowadays there are a lot of simple strategies, which can bring profit despite their primitiveness. The path from simple to complex is considered to be the most promising one in financial markets. If you want to become a professional and succeed in currency trading, follow this way. Remember that the profitability of trading depends very much on the broker that you choose!