The best Forex traders swear by daily charts over more short-term strategies. Compared to the Forex 1-hour trading strategy, or even those with lower time-frames, there is less market noise involved with daily charts. Such charts could give you over 100 pips a day due to their longer timeframe, which has the potential to result in some of the best Forex trades.
Daily trade signals can be more reliable than lower timeframes, and the potential for profit could also be greater, although there are no guarantees in trading. Traders also don’t need to be concerned about daily news and random price fluctuations. The method is based on three main principles:
- Locating the trend: Markets trend and consolidate, and this process repeats in cycles. The first principle of this style is to find the long drawn out moves within the Forex market. One way to identify a Forex trend is by studying 180 periods worth of Forex data. Identifying the swing highs and lows will be the next step. By referencing this price data on the current charts, you will be able to identify the market direction.
- Stay focused: This requires patience, and you will have to get rid of the urge to get into the market right away. You need to stay out and preserve your capital for a bigger opportunity.
- Less leverage and larger stop losses: Be aware of the large intraday swings in the market. Using larger stops, however, doesn’t mean putting large amounts of capital at risk.
While there are plenty of trading strategy guides available for professional FX traders, the best Forex strategy for consistent profits can only be achieved through extensive practice. Here are some more Forex strategies revealed, that you can try: