TOP 3 profitable Forex strategies


Having an effective trading strategy is one of the key preconditions of profitable trading in any financial market, be it foreign exchange, stock, commodity or cryptocurrency market. Sticking to its rules helps make a profit, while chaotic entries are a recipe for disaster and obviously losses.

In today’s article, we are going to throw some light on what a profitable trading strategy is and why you need one, using illustrative examples.


1. What is a trading strategy
2. How to pick the best strategy
3. Trading technical levels
4. Channel trading strategy
5. Moving Average Trading Strategy
6. What strategy do traders need

What is a trading strategy

The trading strategy is essentially a list of steps one needs to take when making trades. It outlines market conditions under which a trade can be opened, specifies direction of the position, and where stop loss and take profit should be placed. Typically, these rules also stipulate the position size and financial instruments these trading strategies can be used for.

So, why should a trader stick to the strategy? It is known that there are specific rules the market follows. The price movement depends on the psychology of its major players, and also has its own patterns. This is what price behavior rules are based on, helping to track down the direction of quote movement. These very patterns lie at the heart of profitable trading strategies. Each of them provides positive mathematical expectation, even though trades can be both losing and winning. That being said, the overall trading result will be in the black.

If each trade is opened according to different rules and signals, this means you are trading chaotically and chances of making money in forex are close to zero.

3 most profitable trading strategies

How to pick the best strategy

When trying to figure out how to trade Forex, the newbies always ask what trading strategy is best to trade with. But there is no correct or definite answer to this since there are so many different strategies while the only criterion that helps differentiate between bad and good ones is mathematical expectation. If the outcome of trades you make according to the chosen strategy for a period of three months or longer remains positive, it is safe to say that the strategy performs well. However, if it fails to produce profits, you should consider switching it up.

Every trading strategy is based on one or several types of analysis: technical, fundamental and indicator one. It can be either simple or complex, and have one or several rules for position opening. It can be as old as exchange trading itself, or developed by a trader on his/her own.

Forex trading strategies used to trade in the currency market can differ in terms of position opening duration. They can be long-term, whereby the position is held open for a month or longer, medium-term and short-term. Intraday and scalping strategies belong to them as well.

What trading strategy will suit your needs best? Your own understanding, preferences and profitability are the factors you should rely on when choosing the strategy. Its rules should be clear to you, and duration for holding positions must be comfortable.

Opt for the strategies that are in line with your lifestyle and mind-set:

  • intraday strategies will work for those who stay up at night worrying about an open position;

  • medium-term ones are popular among traders who cannot spend a lot of time trading;
  • scalping strategies allow making a lot of intraday trades with very short intervals so that you don’t have to devote much time to it; however, it requires utmost focus and are quite exhausting.

Below we shall examine Forex trading strategies even a newbie can master and use to make a profit in the financial markets.

Trading technical levels

This trading strategy is also referred to as support and resistance trading. It is based on the rules of technical analysis. Essentially, there are particular horizontal levels. When the price reaches them, it either rebounds from them, or breaks them out and moves to the next line. According to this strategy, the prices move from one strong level to another, and you can open trades between them using rebound or breakout techniques.

When trading with this profitable trading strategy, you need to draw price levels from a monthly time frame to the one you are working with (e.g. hourly time frame). Horizontal lines are built along the highs or lows on the charts, the shadows a strong movement started from, the values from which the quotes have rebounded upwards and downwards (mirror levels), as well as at the prices of the sideways trend.

The position opening rules are pretty straightforward:

  • When aliliroaching the suliliort level, the lirice can either rebound uliwards or break it out and continue moving downwards.
  • When rebounding uliwards, we olien a long liosition, lilace stoli loss behind the next false breakout, with take lirofit being set beside the next resistance level. The reward/risk ratio should be 1:3, or at least 1:2.
  • If the lirice breaks out the suliliort level and fixes it with a rebound as resistance, we olien a short liosition, lilacing the stoli loss above the confirming high and setting the take lirofit beside the next level located below.

Support and resistance trading strategy


  • What makes it so appealing is simplicity and clear rules. If the price rebounds from support, we go long, when it rebounds from resistance, we go short. When the price breaks out the level, we open a trade in the direction of price movement.


  • There are false breakouts and level confirmation in the market, because of which the trades get closed by stop loss orders. The trader has to gain the necessary experience in order to understand when it makes sense to wait for a possible false breakout and when to re-enter even after being kicked out by stop loss, re-enter because the position holds a lot of promise in terms of profit.

Watch the video to learn more about the strategy

Open an account and start making money with trading now

Channel trading strategy

The technical analysis and Charles Dow’s theory, which states that the prices move in direction of the main trend (moving in channels), lie at the heart of this trading strategy.

Channels in the market can be ascending and descending. Aside from that, the price typically moves in a sideways trend which is basically a corridor between two horizontal levels.

The channel trading rules are super simple:

1. When there is an uptrend, we go long only in case of the third and subsequent rebounds of the price from the support line. Stop loss order should be placed behind the previous low or lower boundary of the channel, with take profit being slightly below the resistance line.

Channel and chart pattern trading strategy

2. Similarly, in case of a downtrend, we open short positions only when the price rebounds from the resistance line. The stop loss order should be placed above the resistance line, with take profit being slightly above the lower boundary of the trend.

3. In case of a sideways trend, we trade rebound in both directions: go long from support with a target at the upper boundary, and go short with a target at support when the price rebounds from resistance.


  • This trading strategy is also pretty simple and straightforward, which makes it ideal for the newbie traders.


  • There have been very few beautiful and technically correct channels forming on the charts recently, so you would have to wait for an entry point for quite some time. However, this problem can be addressed by coupling the channel trading strategy with the level trading strategy described earlier.

Moving Average Trading Strategy

This is a trading strategy where the Moving Average (MA) indicator is used. The indicator and its derivatives are used very often, and trading strategies can be downloaded on any trading-related online resource.

How do you trade it

  1. Apply the 12-period Simple Moving Average (SMA) on to the 15M chart (this is the easiest option).
  2. When the price crosses the SMA line from the bottom upwards, you can open a long position.
  3. If you see that the price has broken out the SMA line from top downward, this means you need to go short.

Simple Moving Average trading strategy


  • The beginners will find this strategy to be simple and clear as it allows making money with short-term intraday trades.


  • It can generate false signals. So, it makes sense to combine it with strategies based on technical analysis to filter off false entries or add another indicator to the chart e.g. one of the oscillators (MACD or Stochastic).
  • Aside from that, this strategy does not work when there is a sideways trend in the market.

What strategy do traders need

The process of choosing a strategy is both simple and complex. Having a trading strategy is a must for traders but the one they eventually pick depends on many, often very personal, factors. Plus, the trading system should be tested out carefully and include its own risk management indicators.

You can either download a trading strategy or get it at a brokerage company. That’s what traders at Gerchik & Co do. The key requirement is that it helps you make consistent profit in the financial markets.

What to know:

Protect yourself against the trading risks

using Risk Manager brought to you by Gerchik & Co!

Learn more about the service

Why should use Risk Manager you will know below

Useful articles:

Login in Personal Account