Flexible Forex Strategies by Gary Ender
Forex traders need a successful strategy made up of components that allows them to be flexible and effective in changing market conditions. Here’s one way to find it.
Trading the financial markets is similar to a great round of golf; the players who use the best techniques and work hard to refine their skills come out on top. Golfers need to be able to play in all conditions, hit shots from different distances, maneuver in any situation, and use all the clubs in their bags. They accomplish this by testing different strategies and swing changes, and getting lots of practice.
The same goes for forex trading. You need a strategy made up of components that allow you to be flexible and remain effective despite constantly changing market conditions. Your approach needs to be tested so you have the confidence to minimize your emotions. In my opinion as a golfer and a trader, the backbone of any successful strategy is learning to use the proper tools of the trade.
I began trading in the currency markets to provide opportunities for when the stock market is consolidating or not providing good-quality trades. The high-odds swing trades in the forex market come in cycles, and therefore, it provides an alternate vehicle for a serious trader. It also gives insight into the stock, futures, and commodities markets.
I prefer to swing trade, but like many, I will daytrade if that is all the market has available. So in an effort to keep things relatively simple, at that point I was searching for indicators with the same flexible qualities as candlesticks. I was looking for just one trading plan that would be effective in different markets and time frames. I found it in forex and candlesticks.
I have been using candlesticks for more than a decade, and I combine candlestick strategies with a group of classic technical indicators such as moving averages, Bollinger Bands, and stochastics. When I selected these indicators, my goal was to have a trading plan that would be effective with many markets and in any time frame.
Candlestick reversal patterns generate support and resistance points that can be used in several ways. The support and resistance formed by the candlestick patterns are the same in every time frame, ranging from a 15-minute chart to a monthly one. Even by using one-minute or tick charts, you can add your favorite Western-style indicators. This is just one reason to have candlestick charting as a part of your strategy.
Using candlestick charting tactics has advantages over other chart types in that they are easy to learn and easy to use.