Strategies for Trading ForexStrategies for trading forex can be as simple or complex as you want to make them.  While some traders need complexity to keep their minds busy, typically the best strategies for trading forex are the simple ones.

Strategies for Trading Forex

Below is a chart of the AUDUSD 15 minute chart from 5am New York time December 23rd to 4am New York time December 24th.  There were six trades generated using the following rules:

  • Price must be within 5 ticks of the ATR
  • On first bar, stop is 5 ticks above the ATR
  • If the ATR flips colors (blue to red or red to blue) an exit is generated

An extremely simple strategy for trading forex based on the ATR providing support or resistance.  The trades and exits generated using these strategies for trading forex were:

  • Short @ .7229, Exit @ .7215
    • Profit:  14 pips
  • Short @ .7219, Exit @ .7225
    • Loss:  6 pips
  • Long @ .7215, Exit @ .7240
    • Profit:  25 pips
  • Long @ .7235, Exit @ 7230
    • Loss:  5 pips
  • Short @ .7234, Exit @ .7239
    • Loss:  5 pips
  • Long @ .7246, Exit @ .7271
    • Profit:  25 pips

The overall profit for the 24 hour period was 48 pips.  Click on the chart to expand.

Strategies for Trading ForexAlthough we could have filtered some of the negative trades using a higher timeframe, these strategies for trading forex show that traders don’t need to make it hard.  They simply need to formulate a plan that can be implemented on the live edge and then follow through on trading it to gain confidence in their trading strategy.  Since the ATR is creates a very low risk entry, then it is logical to take trades at the ATR because it keeps your losses small and by keeping your losses small, the winning trades can overcome the losses.  The chart shows even though there was a 50% winning ratio, because the wins were larger than the losses, the strategies for trading forex are profitable.

The Trend ATR strategies for trading forex will be available soon on a subscription basis for TradeStation, Multicharts, and NinjaTrader.  You will need to subscribe to the indicators before ordering the strategies.