The international Forex market operates chaotically and operates according to the principles of free trade. But the trader’s actions must be systematic, subject to a strict order. For this, strategies have been developed that are used when making deals. The best free trading systems are a set of effective strategies that are completely understandable to understand, universal in use and can bring good profits.
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Simple system based on fractals
The trading strategy uses the Fractals indicator. To identify an upward fractal, a sequential five-bar series must be formed on the chart of the instrument being traded, with two bars with lower values located before and after the highest maximum. Similarly, you can determine the presence of a down fractal. The strategy is used for day trading on the D1 time frame, it is suitable for transactions with all currency pairs. Trading features:
- Study the market situation at the end of the day for the traded asset.
- Opening of an up fractal – a sell trade, exit at the end of the day.
- Formation of the bottom figure – opening buy positions.
To trade using this system, you need to open deals once a day. It is recommended to set the stop loss and take profit parameters at the High and Low levels of the fractal candles. It is also allowed to use a trailing stop of fifty points.
System “Three screens”
For Forex trading, the famous financier A. Elder developed one of the best free trading systems – the “Three Screens” strategy. The point lies in the simultaneous construction of 3 graphs, each of which must be analyzed sequentially. The trading strategy is more suitable for working in the stock market but gives good results with currency pairs. The essence of trade:
- On the first screen, the main trend is determined using the weekly MACD moving average chart. A decrease in the histogram is a sell trade.
- The second screen visualizes the average daily trend using flat indicators of oscillators, in particular, stochastic. Finding signals in the oversold zone is buying, and vice versa.
- The third screen works on short time frames. Aimed at tracking price breakouts relative to the previous day. You need to pay attention to the passage of overbought and oversold zones during the day and in the system in general.
The “Three Screens” strategy is designed to reduce the receipt of conflicting signals when working on different trading periods. The trader needs to closely monitor the movement of the trend within the day in the weekly interval, leaving open profitable positions until the market reversals in a week. Scalpers can open trades based on the second screen of the strategy.
Benefits of trading strategies
There is a huge selection of ready-made systems that traders can use in their trading. To find an effective option for work, any strategy must first be tested on a demo account. It is unrealistic to consider all existing systems and their advantages, therefore, when choosing a strategy, a trader should focus on the simplicity and clarity of the system, versatility of use, and high efficiency. General advantages of using strategies:
- Competent actions in the market based on mathematical algorithms and historical data.
- Making decisions based on received signals, which reduces the likelihood of losing trades.
- The ability to adjust the best free trading systems as the market situation develops.
- When using a strategy, a trader operates with important data, has charts and indicators at his disposal to make the right decisions.
It should be noted that the same trading system can give different results when working with different instruments, time intervals, and lot volumes. Any system needs to be checked many times, evaluating its effectiveness in order to sleep peacefully. Systematic trading is the path to profitable trades in the Forex market.