how many trading strategies should you use

Woman thinking and staring at light bulbs

Felicitous Friday!

This week's question comes from Moshood, who asks:

How many trading strategies should I have when trading the Forex commercialize?

There are thousands of trading strategies available to the Forex bargainer.

In fact, when you account for the infinite number of technical indicators available, the possibilities are limitless.

Information technology's easy to think that the more than strategies you use, the Sir Thomas More money you will make.

However, I've found the opposite to be true.

You don't need to use twenty, ten or even five antithetic trading strategies to achieve achiever. And if you try to learn that many at once, you're setting yourself up to struggle.

So how many do you need? Moreover, how many should you teach at one time?

The answer to both of those questions power surprise you. Read connected to memorise how many strategies you power need you bet to pop off about finding the 'right' peerless. I'll too percentage my favorite deuce strategies that you can begin using today.

Learn Peerless Strategy at one time

I'm a firm believer in learning one trading scheme at a time.

The issue many a traders run into is that they spread themselves to a fault thin. They jump from scheme to strategy without attractive the time to learn everything in that respect is to know close to unrivalled in particular.

This creates two issues.

As mentioned above, you can't read altogether of the intricacies of a strategy without devoting the necessary time and vigor. And without that, you aren't likely to find success with it.
No strategy will make you consistent profits right away. Regardless of how good the strategy is, it's leaving to take time to know whether information technology's profitable or non.

By restrictive yourself to one strategy at a time, you will accelerate the acquisition process. You besides find out whether information technology's right for you—and your trading life history—that much faster.

When I suggest this, I usually pay off responses look-alike:

With an infinite number of trading strategies out in that location, how can I peradventure find a profitable one if I'm only learning one at a time?

This introduces an interesting propulsive.

You see, most traders embark on their search away looking for 'profitable' strategies. But the thing is, thither's no such thing as a universally profitable trading strategy.

If I were to try to scalp using someone else's strategy I would struggle, regardless of how profitable that person is with the same strategy.

That's because I'm non a scalper. It doesn't convulsion with my personality nor does it match my overall approach to the markets.

What conclusion can we draw from that?

Start by distinguishing what type of strategy you intend would equalise your personality. Solitary then should you concern yourself with determination one that you determine to be profitable.

E.g., if you feel well-fixed with swing trading, pursue various strategies attendant that type of trading.

If you discovery yourself gravitating toward the smaller metre frames, scalping strategies mightiness be best for you.

There's zero one size up fits all, but aside identifying a type of scheme first, you'll save yourself a ton of time and effort in the long haul.

As for how many you necessitate, the answer varies. That aforementioned, you real only need one or two to succeed in this business enterprise.

All you need is one pattern to make a living.

Linda Raschke

If I Had to Use Just Two Patterns

Although I use several chart patterns and candlestick signals to trade Forex, I do have two favorites.

When IT comes to chart patterns, nothing compares to equidistant channels. They occur more often than most traders realize and throne produce incredibly lucrative trade setups.

They also illustrate market structures like integration. That May non sound too exciting, just periods of consolidation often lead to breakouts.

Here's an case of an ascent channel that formed connected the GBPNZD 4-60 minutes chart:

GBPNZD ascending channel break

Notice the breakout that occurred. That act on can be listed in the direction of the prior trend, which in this case resulted in single hundred pips.

Atomic number 3 for candlestick patterns, nothing comes close to the pin bar in my opinion. IT's a signal I've used for years and has worked improved than any other.

What makes the tholepin ginmill specific is the long upper or lower taper. It suggests an influx of buying surgery selling pressure in the area.

When you pair that with a key support or opposition level, it becomes a highly effective candlestick blueprint.

Here's an example of a bullish pin bar that occurred on the NZDJPY daily graph:

Bullish pin bar at support

One matter you can go for maximum effectiveness is to combine channels and fall bars.

E.g., when a vogue pair breaks a channel and and then forms a pin bar (operating theater long-tailed candle) on the retest.

EURGBP ascending channel break with bearish pin bar

So there you have IT. If you're sounding for a needle-shaped chart pattern and a candlestick formation to compliment it, look no further than channels and fall bars.

Keep in mind, nonetheless, that these are my favored. As mentioned originally, it's important that you find a strategy, or set of strategies, that fits your personality.

Final Words

I suggest learning one strategy at a time. If you spread yourself too thin, you won't live capable to give the necessary time and energy to one scheme to ensure it through and through.

If I were forced to use just one chart radiation pattern, it would have to be up and descending channels. They oftentimes occur on 4-hour, daily and weekly time frames, and crapper make incredibly profitable setups.

You can also sell within a channel or use it to place breakout opportunities. This flexibility makes channels unmatchable pattern I couldn't trade without.

The one candle holder pattern I would choose is the pin measure. Its long upper operating theater lower wick provides insight into where there's an influx of supply or demand, especially when it occurs at support or resistance.

Use pin bars together with channels and you have a combining that can give you an edge in any market.

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