Ready to move to the next stage of Forex trading? In this article, we’ll share Forex trading strategies for advanced-level traders. Our goal is to help you navigate the tough trading terrain so you can achieve consistent results.
Forex trading strategies for advanced users include selecting the right currency pair, setting position sizing, and understanding the entry and exit points. You’ll also learn how to fine-tune your trading tactics and look at the bigger picture rather than focusing on daily wins and losses.
Let’s explore the mindset and strategies of an advanced-level funded trader.
Comprehensive Technical Analysis
Effective technical analysis is the first major step toward working as an advanced trader. For this, you should educate yourself on the advanced parameters. Specifically, you’ll want to learn more about:
- Fibonacci patterns
- Economic indicators
- Data analysis
- How to analyze currency pairs, time frames, and trading sessions
Using this information, you can easily build a trading strategy that suits your trading style, which is pivotal to achieving success. There are also more advanced Forex trading strategies you must learn, such as price action trading, Ichimoku cloud trading, and order block trading, along with trading types like swing trading and position trading.
Ichimoku Trading Strategy
The Ichimoku trading strategy is focused on market trends, whereas the order block strategy is more about knowing the market levels and the position of institutional traders versus the market levels. Ichimoku comprises the Kumo Cloud plus resistance and support zones.
Traders must keep an eye on the cloud. When the market price is above the cloud, the price action is considered bullish. And when the market price is below the cloud, it’s a bearish market.
The Ichimoku system comprises these two key indicators:
- Kijun-sen (Base Line): Kijun-sen calculates the average of the highest high and the lowest low of an asset over 26 periods. This indicates short-term to medium-term price momentum. Kijun-sen is always used with Tenkan-sen to determine the direction of the trend.
- Tenkan-sen (Conversion Line): This indicator calculates the average of the highest high and the lowest low over nine periods. It provides insights into short-term price momentum. When Tenkan-sen crosses the Kijun-sen line, it’s considered a bullish indicator. It indicates that the price is moving upward.
Apart from this, there are more indicators, such as the Chikou Span (Lagging Span), Senkou Span A (Leading Span A), and Senkou Span B (Leading Span B), that help traders identify trends and reversals. Knowing these indicators can help you further refine your Forex trading strategies.
Volume Analysis and Technical Analysis
These analyses identify market activities:
- Volume Analysis: The trading market boasts a large volume of currency transactions. Analyzing volume trends can tell you about the market strength. This analysis should be used in conjunction with price movements. A price increase along with a volume increase indicates a bullish trend. However, a price decrease amid a volume increase can point to a bearish trend.
- Technical Analysis: Advanced traders work with indicators such as On-Balance-Volume (OBV) and Accumulation/Distribution (A/D) lines. With these, the traders can better measure buying and selling pressure in correspondence with the price and volume changes.
Using these analyses, you can make well-informed decisions. When coupled with the right research tools, all trading activities and strategies breed better results. These research tools are essential for data integration and verification. So, choose tools that can easily integrate into the trading platform of your choice.
Advanced Risk Management Strategies
Risk is a part of Forex trading. After all, you can’t win big without taking risks. But no one can completely predict the Forex market and dictate its position. So, every trade you take can be a win or loss due to the probabilistic nature of the market.
But that doesn’t mean you can’t control the risk. In fact, understanding risk management can ensure your capital will remain safe. Here are some advanced Forex trading strategies to consider:
Position Sizing
Position sizing is the dollar amount an investor puts into a trade. Advanced traders usually don’t risk more than 2% of their capital, but some do risk more depending on their risk appetite. However, to determine the position sizing that best suits your trading style, you’ll need to consider three factors:
- Determine the dollar amount you’re comfortable risking for the entire account.
- Determine how many pips you’re willing to risk for each trade along with the pip value for each pair.
- Divide your account risk with the trade risk to arrive at the correct position sizing.
Identify Your Stop Level Accurately
Advanced traders use smart Forex trading strategies and never set their stop levels randomly. Instead, they execute the stop level carefully, according to their risk management strategy. Experienced traders also calculate their daily stop loss. This amount equals the average daily profitability. By following this Forex trading strategy, you can ensure your losses won’t be bigger than your profits.
Set Up an LLC
Forex trading is volatile because so much depends on the market conditions. Many traders prefer to set up an LLC business structure to protect their assets. It also gives tax benefits, which means you’ll be able to save more money.
Algorithmic and Automated Forex Trading Strategies
These Forex trading strategies operate on pre-determined parameters. This means you can automate some of your work.
Algorithmic Trading
This strategy combines the power of computing with the experience of a human to execute the trades at specific moments. Here’s how it works: algorithmic models analyze market data, such as price movements, volume, and other technical indicators, based on pre-set conditions.
It then removes human emotions to identify trading opportunities. Hedge funds and institutional traders rely on algorithms to place large trades.
Artificial Intelligence Trading
This is the latest addition to the Forex trading industry, and you should definitely take its help for better results. Artificial intelligence (AI) and machine learning can provide market predictions and conduct faster analysis.
Integrate AI into your trading strategies to speed-test the performance of your different tactics. This can help you decide which strategy will give better results.
Implement Your Forex Trading Strategies with The Funded Trader
Investing money is never an easy decision. But you can streamline it with effective analysis and a predetermined structure. These advanced Forex trading strategies will give you an effective and functional plan to execute winning trades.
Ready to advance in your trading journey? Get started today.
