Forex Trading
Strategies
Proven strategies that work in real markets. Learn the rules, practice on demo, and find the approach that fits your trading style — updated for 2026.
Forex Trading Strategies
Each strategy has clear rules for entry, exit, and risk management. Pick one that matches your personality and schedule.
Trend Following
Trade in the direction of the prevailing trend. The trend is your friend until it bends.
How to Trade It:
- Identify trend direction using 50/200 MA or higher timeframe
- Wait for pullbacks to support in uptrends (resistance in downtrends)
- Enter when price shows rejection at support/resistance
- Place stop below swing low (above swing high for shorts)
- Target 2x your risk or next major support/resistance
Breakout Trading
Trade when price breaks through key support/resistance levels with momentum.
How to Trade It:
- Identify consolidation ranges or chart patterns (triangles, rectangles)
- Mark clear support and resistance levels
- Wait for candle close beyond the level with increased volume
- Enter on retest of broken level or immediately on strong breakouts
- Stop below breakout candle, target measured move of pattern
Support & Resistance
Buy at support levels, sell at resistance levels. The foundation of technical trading.
How to Trade It:
- Draw horizontal lines at major turning points
- Look for levels tested multiple times (stronger)
- Wait for price action confirmation (pin bars, engulfing)
- Enter with stop beyond the level
- Target the opposite support/resistance zone
Moving Average Crossover
Trade when fast MA crosses slow MA. Simple, mechanical, and easy to follow.
How to Trade It:
- Apply 20 EMA and 50 EMA to your chart
- Buy when 20 EMA crosses above 50 EMA
- Sell when 20 EMA crosses below 50 EMA
- Filter with higher timeframe trend direction
- Exit when opposite crossover occurs or hit target
Fibonacci Retracement
Trade pullbacks to key Fibonacci levels (38.2%, 50%, 61.8%) in trending markets.
How to Trade It:
- Identify a clear trend move (swing low to swing high)
- Draw Fibonacci retracement from swing points
- Wait for pullback to 38.2%, 50%, or 61.8% level
- Look for price action confirmation at the level
- Enter with stop below 78.6% level, target new highs/lows
RSI Divergence
Trade when price and RSI disagree, signaling potential reversals.
How to Trade It:
- Add RSI (14) indicator to your chart
- Bullish divergence: price makes lower low, RSI makes higher low
- Bearish divergence: price makes higher high, RSI makes lower high
- Wait for price confirmation (break of recent swing)
- Enter on confirmation with stop beyond divergence low/high
London Breakout
Trade the volatility when London session opens, breaking out of Asian range.
How to Trade It:
- Mark the Asian session high and low (midnight to 7 AM GMT)
- Wait for London open (8 AM GMT / 3 AM ET)
- Enter on break of Asian high or low with strong momentum
- Place stop at opposite side of range
- Target 1.5-2x the Asian range or next S/R level
Price Action Trading
Trade candlestick patterns at key levels without indicators. Pure chart reading.
How to Trade It:
- Identify key support/resistance levels
- Wait for reversal patterns: pin bars, engulfing candles, inside bars
- Pattern must form AT the key level, not in random areas
- Enter on break of pattern with stop beyond pattern
- Target next major level or 2x risk
Every Strategy Needs These
A complete trading strategy is not just about entries. These components turn a trading idea into a tradeable system.
Entry Rules
Specific conditions that must be met before entering a trade. No guessing, no maybes.
Exit Rules
When to take profit and when to cut losses. Defined before you enter, not during.
Position Sizing
How much to risk per trade. Usually 1-2% of account, calculated from stop loss distance.
Risk Management
Stop loss placement, max daily loss, max drawdown rules. Protects your capital.
Timeframe
Which charts you trade. Match your timeframe to your lifestyle and personality.
Market Selection
Which pairs you trade. Focus on 2-3 pairs you understand well rather than watching everything.
How to Choose Your Strategy
The best strategy is one you can actually follow consistently. Match it to your lifestyle.
If You Have a Full-Time Job...
Use 4H or Daily charts. Check charts morning and evening. Swing trading and trend following work well. Do not scalp or day trade — you will miss signals and make mistakes.
If You Are Impatient...
Breakout trading or London Breakout gives quick results. Avoid daily timeframes — the wait will drive you crazy. Consider scalping if you can handle the intensity.
If You Like Analysis...
Price action or Fibonacci strategies let you dig into charts. You will enjoy analyzing patterns and levels. Avoid simple MA crossovers — too mechanical.
If You Want Simplicity...
Support/Resistance or MA Crossover strategies have clear, simple rules. Avoid indicator-heavy strategies or complex pattern recognition.
Best Brokers for Strategy Trading in 2026
Brokers with good charting tools, educational resources, and reliable execution.
AvaTrade
- 55+ forex pairs
- Free trading signals
- AvaProtect risk tool
- Educational resources
- Partner code: 128979
eToro
- Copy successful traders
- 49 forex pairs
- Social trading features
- Great for beginners
- User-friendly platform
Axi
- 70+ forex pairs
- Raw spreads from 0.0
- Free Autochartist
- MT4 signals built-in
- Low minimum deposit
We recommend opening demo accounts with two or three brokers to test their charting tools and execution before committing real money. See our full broker comparison tool for more options.
Frequently Asked Questions
What is the best forex strategy for beginners?
Trend following or support/resistance trading are the best starting points. They are simple to understand, have clear rules, and do not require complex indicators. Master one strategy completely before adding others.
How many strategies should I use?
Start with one. Master it before adding another. Many profitable traders use just 1-2 strategies their entire career. Having multiple strategies can lead to confusion and overtrading. Quality over quantity.
Do I need indicators for forex trading?
No. Many successful traders use price action only (support/resistance, candlestick patterns). Indicators can help, but they lag price and can be distracting. Start simple, add complexity only if needed.
What timeframe is best for forex trading?
It depends on your schedule and personality. Day traders use 15min-1H, swing traders use 4H-Daily. Higher timeframes have more reliable signals but fewer opportunities. Match your timeframe to your lifestyle.
How long does it take to become profitable?
Typically 1-3 years of consistent practice. Most traders blow their first few accounts learning. Fast progress comes from keeping a trading journal, reviewing trades, and focusing on process over profits.
Ready to Test These Strategies?
Open a free demo account with a regulated broker and start practising these strategies today. No risk, no commitment — just real market conditions.
Partner Code 128979 applied automatically. $100 minimum deposit. Your capital is at risk.
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