They say that when things are outdated, they no longer work. Well, that is not the case with these 10 Outdated Forex Trading Strategies that Still Work. While other strategies may have been replaced or forgotten, these 10 strategies still stand the test of time and continue to be used by profitable traders today.
1. The Trend is Your Friend Strategy
One of the oldest adages in trading is “the trend is your friend”, and this could not be more true in the world of forex. This strategy is all about riding the waves of a trend and making profits along the way.
This only means that whatever direction the price is moving in, that is the direction you want to trade in.
2. The Fibonacci Retracement Strategy
The Fibonacci Retracement Strategy is used as a predictive technical indicator and is based on the turn of events that occur during nature. This strategy is used to find out when a market may potentially reverse course after a corrective wave.
Fibonacci retracements are created by drawing a trendline between two extreme points and then dividing the vertical distance by the Fibonacci ratios of 23.6%, 38.2%, 61.8% and 100%.
3. The MACD Indicator Strategy
The MACD Indicator Strategy is a momentum indicator that can be used to find out when the market is overbought or oversold. This strategy is based on the Moving Average Convergence Divergence (MACD) technical indicator which is a trend-following momentum indicator.
The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. A 9-day EMA of the MACD line is then plotted to act as a signal line and generate buy/sell signals.
4. The Parabolic SAR Strategy
The Parabolic SAR Strategy is a trend following technique that can be used to find out when a market is about to make a reversal. This strategy is based on the Parabolic SAR (Stop and Reverse) technical indicator which is used to identify potential reversals in price.
The Parabolic SAR is calculated by taking the highest high of the previous candles and the lowest low of the previous candles, and plotting them as a point on the chart. The points are then connected to form a parabolic curve.
5. The Stochastic Oscillator Strategy
The Stochastic Oscillator Strategy is a momentum indicator that can be used to find out when the market is overbought or oversold. This strategy is based on the %K and %D line of the stochastic oscillator which is used to generate buy/sell signals.
The %K line is calculated by taking the current close price and subtracting the low of the previous 14 days, and then dividing it by the high of the previous 14 days minus the low of the previous 14 days. The %D line is a 3-day SMA of the %K line.
6. The Relative Strength Index (RSI) Strategy
The Relative Strength Index (RSI) Strategy is a momentum indicator that can be used to find out when the market is overbought or oversold. This strategy is based on the RSI technical indicator which is used to generate buy/sell signals.
The RSI is calculated by taking the average of the closing prices of the last 14 days and dividing it by the standard deviation of the closing prices of the last 14 days.
While there are many different forex trading strategies out there, these Forex Trading Strategies remain to be some of the most profitable and commonly used by traders today. So don’t let anyone tell you that these strategies are outdated and no longer work because they definitely do!