The 5 Most Profitable Simple Trading Strategies

Are you looking to make smarter investments, but you don't know where to start? Whether you're a beginner or an experienced trader, these five simple trading strategies can help you get the most out of your trades and maximize profits.

After yesterday we discussed the forex guide for beginners, this article will help you understand simple but profitable trading techniques 

Learn how to leverage high-yield strategies today! 

Simple Trading Strategies

Moving Average (MA)

What are Moving Averages?

Moving Averages (MA) is the simplest and most popular indicator that traders often use to determine entry positions. MA is usually calculated from the sum of the closing prices in a certain period divided by the number of time units in that period.

How to use MA?

In using MA, there are 3 most effective ways, namely as a trend filter, as a trigger to open a position, and identification of crossover points to confirm a correction or trend reversal.

Moving Average Crossover Strategy.

The Moving Average Crossover Strategy is one of the most well-known and popular trading strategies. It helps traders identify trending markets and opportunities for buying or selling. 

This strategy works by comparing two moving averages of different lengths to create buy and sell signals. When a shorter MA (usually 20 periods) cross above a longer MA (usually 200 periods),

this is seen as a buy signal, indicating the market is moving in an uptrend. Conversely, when the shorter MA crosses below the longer MA, it’s seen as a sell signal indicating the market is in a downtrend

How to install MA on Trading platform?

How to install the MA indicator on the trading platform is also very easy, both on MT4 and MT5. Please click the insert menu then select an indicator, then select a trend, then select a moving average pay attention to the picture below

 

Breakout Trading Strategy.

Breakout Trading Strategy is a form of trading that takes advantage of new movements/breakouts in the market. A breakout occurs when the price of an asset moves beyond a certain level compared to its average range. 

In this strategy, traders would look for chart patterns, support and resistance levels, or Fibonacci retracement levels to identify a possible breakout opportunity. 

Why Breakouts Could Prove the Ultimate Strategy for Forex

Among the myriad of trading strategies that you can apply to your Forex account, the breakout strategy is one that could ultimately prove to be the most rewarding.

A breakout occurs when the market price moves beyond a prior identified trading level. 

This could be a level of support or resistance, a move outside of a technical reading or a breakout from an overnight trading range for example. Whatever the trigger, the breakout is the point that price action pieces this level and the price surges into a new trading range.

They can then place their order just above the resistance level once it’s breached and capture the profits when it starts trending in the predicted direction

Momentum Trading Strategy.

Momentum Trading Strategy is a form of trading that exploits the speed and strength of price movements. Traders look for stocks that have been gaining rapidly in recent days and weeks, and they place their order ahead of the trend while it’s still going up. 

This strategy requires traders to be quick on their feet and able to enter and exit positions at just the right time.

They should also be well-versed in technical analysis tools, such as indicators and chart patterns, to help them identify possible entry points.

Support and Resistance Trading Strategy.

Support and Resistance Trading Strategy is a very popular strategy used by traders when entering and exiting positions. It involves identifying key support and resistance levels in the market, where you expect trading to stall or reverse. 

When these levels form via consolidations of price around them, they become even more important.

Traders can use tools such as moving averages and Fibonacci retracements to identify potential support/resistance levels, as well as chart patterns such as double tops/bottoms. Knowing where these areas lie and how to enter or exit positions near them can be a powerful strategy for any trader.

Wave Analysis and Market Cycles Strategies.

Wave Analysis and Market Cycle Strategies are a great way for traders to gain an edge in their trading decisions. 

By understanding the market cycles, one can accurately predict when markets will start trending or reversing. Wave analysis tools such as Elliott Waves, Gann Waves, and Fibonacci Retracements can help traders identify potential support and resistance levels in the market. Being able to identify these areas of interest gives the trader a clear idea of when they should enter or exit positions near these points for optimal profits.