Intraday Forex Strategies -Create your own Forex Trading Strategy

Implementing a trading strategy that is suitable to your risk profile is absolutely necessary when trading Forex Currencies. The Foreign Exchange market is characterized by high volatility and uncertainty. Therefore, only the existence of a trading plan and a money management (MM) system with specific rules can lead you to long-term success. There are hundreds or even thousands of different trading strategies that cover all trading styles (intraday, automated, swing, position, and long-term trading). The selected trading strategy must be 100% compatible with your risk profile and general personality.

 

Trading Intraday -Basic Requirements

 

Trading intraday is very risky and not suitable for all Forex Traders. To evolve as a successful intraday Forex trader, you need to have a very specific trading plan, a money management system, and discipline to implement both. A set of logical rules covering all market conditions can help you when you are trading in tiny timeframes.

Never be emotional with your trades. Emotional trading is a disaster when trading intraday.

 

The Importance of ECN/STP Brokers

 

Trading with a competitive Forex Broker is also very important. ECN/STP Forex brokers are the best choice for intraday traders as they offer low-cost trading and fast execution with minimal slippage. Here are some important features that you should demand when choosing an ECN/STP Forex Broker:

i) Tight spreads and low commissions on the pairs that you will trade most

ii) Optionally, offering a trading rebate plan that may prove helpful in minimizing your trading cost

iii) Fast execution without any price manipulation (true ECN)

iv) Fully allowing scalping

 

On the contrary, Dealing-Desk brokers (market makers) can’t offer the above features. This is happening as Dealing-Desks create markets within markets and that means high trading slippage, delays in order execution, and high price manipulation.

» Compare ECN/STP Brokers

 

 

Building your Intraday Trading Strategy

 

The first thing you need to do to build a custom trading strategy is to find a lot of trading ideas. These ideas may concern recent price behavior, pattern recognition, statistics, etc.

 

Trading Ideas for Building a Trading Strategy

 

■ Learn about the Forex Price Action by examining historical charts

■ Examine the effect of the Forex sessions overlaps

■ Examine the effect of certain days of the week or the effect of certain days of the month

■ Examine the historical effect of news during certain periods

 

Using Technical Analysis

 

■ Examine Trending Markets using key moving average crossovers

■ Examine Ranging Markets using the Bollinger Bands or the Parabolic SAR

■ Examine the Relative Strength Index (RSI) for 21 periods on the M5 timeframe and concentrate on reversing trends

■ Learn about the Ichimoku Kinko Hyo

■ Add daily pivots and examine how a Forex pair reacts when it reaches or when it crosses the pivot level

 

A Typical Framework to Design Your Strategy

 

These are some typical (but not necessary) points in order to build your own trading strategy:

◘ Combination of 2 Technical Analysis Tools

◘ Combination of 2 different timeframes, the longer timeframe will define the trend while the shorter timeframe will indicate the right timing for entry/exit

◘ Historical Backtesting (How your strategy would have performed in the past?)

◘ Ongoing Testing (test your strategy on a demo account for a couple of weeks before moving on a real account)

◘ Money Management (Decisions regarding the size of trades, trading leverage, stop-loss orders, etc.)

 

Choosing When to Trade

 

In order to trade successfully, you must choose when to trade what. Selective trading is absolutely a must. Not every day and every hour will be suitable for trading. Learn about session overlaps and take advantage of them. Session overlaps offer high liquidity and nice trade opportunities. Moreover, identifying a Strong Trend or a Strong Price Range is considered very important for all intraday traders. Once you have detected a strong trend, follow it by using a trailing stop order. If you have detected a strong price range it is easy to calculate take-profit and stop-loss orders.

 

Making Things Simple

 

The Foreign Exchange Market is already too complicated don’t try to make things even harder. Be simple and design your strategy with clarity and precision.

You may use technical analysis to forecast an upcoming trend or any other tool if that is suitable to your own trading style and personality.

 

Managing Risk

 

The way you manage your risk exposure and your funds matters. Forex Trading is all about managing your risk. Effective Risk Management is the key factor distinguishing winners from losers. Professional traders are always trying to hedge against risk and apply complicated portfolio diversification techniques. On the contrary, retail traders trade larger than they should and sooner or later lose all their funds. Always manage your risk as pro traders do and prefer always to trade small sizes.

 

Automate Your Trading Strategy

 

Sophisticated intraday traders automate their strategies via the development of an Expert Advisor to save time. There are a lot of MQL4 programmers out there to do the job. They usually charge $50-500, depending on the programmer’s experience and the complexity of the coding project. After your strategy is transformed into an Expert Advisor you can back-test it historically using MetaTrader4. Alternatively, you can build your custom strategies as explained below.

 

Creating Automated Trading Systems without any Programming Skills (EA BUILDER)

 

For those who lack programming skills, there is an advanced online application (EA Builder) that can provide a user-friendly interface for transforming ideas into fully automated trading strategies.

 

EA Builder Basic Features (for MT4, MT5, or TradeStation)

 

• 100% Web-based App (PC, MAC, or Linux-based computer)

• Free for creating indicators, requires $97 (one-off) if you need to create EAs

• Full set of built-in functions (including even trendlines and time parameters)

• Full Money-Management system modules

• The outcome is a single compiled MQL4/MQL5 file, ready to trade

• Compatible with MT4, MT5, and TradeStation platforms

 

The EA Builder is an application that can transform trading ideas into indicators or Expert Advisors (EAs). It is important to mention that to use EA-Builder you do not need to have any programming skills. Even beginners can use the application.

 

Automated-Trading Functions

 

• Full functionality (time, support & resistance, trendlines, etc.)

• Insert multiple money management systems (Adjust Lot Size, Number of Contracts, etc.)

• Develop EAs for trading any market using any instrument (including Binary Options)

• EA Builder Output is human-readable and it is included in a single file

• Martingale / Anti-Martingale techniques

• Customize Time Preferences and select even specific Days / Hours to trade

 

Start Building Indicators for Free

 

The EA Builder for creating Indicators is completely free and without any time limits. Later you can transform these indicators into fully automated trading strategies. The full version that enables creating Expert Advisors costs 97 USD (one-time).

» EA Builder Free for Creating MT4/MT5 Indicators

 

■ Intraday Forex Strategies -Create your own Trading Strategy

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