To make money trading forex, you need a reliable strategy. While many strategies can be successful, not all will work for every trader. That’s because each person has different goals, risk tolerance levels, and investment amounts.
That’s why it’s essential to find a strategy that suits your individual needs. Here are six of the best forex strategies for 2022. Each one has been proven successful for many traders, so you can be confident in using them yourself.
6 Strategies Experts Recommend
We’ve compiled a list of the six best forex strategies for 2022. These strategies have been tested and proven to work in today’s market.
Fibonacci Forex Strategy
The Fibonacci forex strategy is based on the Fibonacci sequence. This strategy uses mathematical ratios to predict future price movements. You can identify support and resistance areas using the Fibonacci retracement levels by drawing horizontal lines at the points where you can find these crucial levels.
Forex traders can use the Fibonacci indicator to determine where to place their entry and exit orders. The key is to put your stop-loss at or above the prior swing low (uptrend) or below the prior swing high (downtrend).
Bollinger Band Forex Strategy
A Bollinger band strategy can identify potential support and resistance levels in the market. The simple moving average (SMA) on the central line is set to 20 days, while the upper and lower lines measure market volatility.
The bands will widen when the forex market becomes highly volatile and get closer together when it’s calm. When the price reaches the outer bands, it often triggers the market to rebound back towards the central 20-period moving average.
The Bollinger band strategy helps identify potential support and resistance levels. It also helps traders determine when the market is becoming more or less volatile and when the price reaches its extreme levels.
EMA Crossover Strategy
The Exponential Moving Average, or EMA, guides traders to know the market’s direction using two EMAs of different values. EMA crossover methods use the intersection of two EMAs to enter the market.
EMA crossover strategies are simple strategies that traders of all experience levels can use. It also provides a good indication of the direction of the trend once it starts. The strategy can also be used on any time frame chart and is not limited to daily or weekly charts.
Momentum Indicator Forex Strategy
The momentum indicator forex strategy takes the most recent closing price and compares it to the previous closing price. It is displayed as a single line, usually on a separate chart below the main price chart.
The indicator oscillates to and from a centreline of 100. How far the indicator line is above or below 100 indicates how quickly the price is moving.
Momentum indicators can help in identifying overbought and oversold signals. Forex traders can use it to determine the market’s strength and whether the price is rising or falling. It’s critical to make sure the market has heeded the momentum indicator in the past and identify those variables that appear to be effective.
Keltner Channel Forex Strategy
The Keltner Channel is a volatility-based trading indicator that traders can determine when the currency pair moves too far from the moving average.
The Keltner Channel has two boundary bands constructed from two ten-day moving averages on either side of an exponential moving average. Traders can compare the price relationship to each side of the channel to determine whether a currency is oversold or overbought.
Gann Trend Following Strategy
The Gann Trend Following Strategy determines the next possible direction of the market using an indicator based on the angles of William Delbert Gann.
The Gann Trend Following Strategy uses a technical indicator to decide the market’s next possible direction.
When the Gann indicator shows a yellow ribbon, it means that the market has potentially entered a downtrend. On the other hand, an uptrend comes when the indicator shows a blue ribbon. Ideally, you should enter a position just after the close of the candle that shows the ribbon change.
The benefit of drawing a Gann angle is that it moves uniformly. This makes it easier for the analyst to forecast the price on a particular date.
Consult with Forex Trading Experts
While no strategy is perfect, using these methods should give you a good starting point for your trading career.
If you are unsure about which strategy to use, you should contact an experienced forex trader to help you. Get started with Fair Forex today.