Forex 1 hour trading strategy
If you happen to have so much time during the day then 1 hour chart trading is an ideal Forex strategy. This kind of system is based on 1-hour time frame; convenient enough when it comes to screen time demand and significantly successful in a trending market. More so, it fits with all the major currency pairs.
1 HOUR TRADING PROS AND CONS
Its primary function is to transform collected history data and trading hints. Such is necessary for traders to detect anomalies and formations. Based on this, traders can easily speculate price movement accurately and to modify it.
This also guarantees stable and firm results as it functions with the help of proportional cost averaging. Though simple, it is proven to be effective as it only requires four prerequisites: indicator arrows, trend filter cross, stealth buy/sell pressure, and FDM multitrend.
However, though this kind of trading is highly advantageous, it comes with setbacks too. Some of it includes the settlement and domination of false trading signals that go together with accurate ones. This kind of trading also projects price movements vaguely.
TOOLS AND INDICATORS TO USE
An individual does not have to utilize all tools and indicators there is. What one needs to know is what indicators best suits the Forex strategy that he or she is using.
As for this kind of strategy, one needs to trade within a one hour timeframe with any of the following major currency pair, (EUR/USD, USD/JPY, GBP/USD, AUD/USD).
400 and 100 exponential moving average will indicate market status. If the faster EMA is above the slower one, it denotes an uptrend. More so, it is downtrend when the faster EMA is under the slower EMA.
One query about this kind of strategy is the ideal time to position trades. 100 pips momentum indicator and indicator arrows will help you determine such. In 100 pips momentum indicator’s case, if its blue line overlaps the red line from below and the indicator arrows show a green arrow pointing upward, then it is best to place a long position.
In line, 100 pips momentum indicator also reveals short position opportunities. If when the blue line overlaps the red line from above and indicator arrows turn into red arrows, it is indicating that a short position should be made.
BUY TRADE RULES
- Once the faster exponential moving average trends above the slower EMA, it signifies an uptrend. If this is the case, trade long position.
- Specific intervals between defined points must be observed before opening trades in average.
- To get target profit, the preliminary target profit must be multiplied by how many long positions are open.
- Once the faster EMA closes under the slower EMA, it signifies a coming uptrend and is ideal to close trades.
SELL TRADE RULES
- Once the faster exponential moving average trends underneath the slower EMA, it is an indication that the market is downtrend. Thus, consider short position.
- Specific intervals between defined points must be observed before opening trades in average.
- To get target profit, the preliminary target profit must be multiplied by how many short positions are open.
- Once the faster EMA closes just above the slower EMA, it indicates that the market is downtrend and is ideal to close trades.
WHAT ARE THE RISKS
Knowing how much information your preferred chart holds will be a great advantage. Say that a daily chart has a day worth of information. With that comes bigger money to put at risk should you place your position in respect to your entry and stop loss. However, if you trade with one hour time frame, it will only require an hour’s worth of data. This will make your stop distance smaller.
