When it comes to developing a strategy there are a number of approaches a trader can take. Most of the strategies start with a certain way of market monitoring. This means taking specific data from a chosen time period and building the estimation based on it.
One of the techniques used by advanced traders is studying the intraday charts. Intraday itself means “during one day”. That includes various time frames within one chosen day on the market.
The trader can set up the chart to any time period they prefer. But not every time setting is beneficial for a successful trade. Today we will focus on Forex one hour trading strategies and how to use them to your advantage.
Advantages of the 1 hr Forex Trading Strategies
As you might have guessed from the name, 1 hour trading strategy is based on 1 hour market chart. It comes in handy when traders do not have a lot of time on their hands. So instead of locking eyes to the screen they check the chart once every hour.
Besides the reduced amount of time, the Forex 1 hour scalping strategy is pretty straightforward and easy to observe. Since the time frame is limited, the data will be more precise and simple to understand. This is a great advantage for trading beginners.
It is often advised by professional traders not to set up the time frame to less than 1 hour. The reason for that is all the time periods smaller than 60 minutes will be clouded with too much noise, and as a result can be nearly impossible to comprehend.
Disadvantages of the 1 hr Forex Trading Strategy
However, as simple as it is the Forex 1 hour chart strategy formulation is not always a good idea. Mainly due to unsatisfying reward to risk ratio. Although this can be handled by stop trailing, it does add extra steps to the process.
It is also important to keep in mind that the best 1 hour Forex trading strategy is the one that is combined with other strategies. The most common method is to monitor hourly charts compared with the daily chart. This gives a trader a fuller picture and therefore a better idea for a successful bid.
1 hour Forex Scalping Strategy
Before getting technical and starting to study the one hour charts, the first thing to do is to get familiar with market charts in general. Take your time to familiarize yourself with the associated terminology as well as the MT4 options and settings. The key is to be as resourceful as possible and utilize different time frame charts in order to develop a successful strategy.
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FAQs
First check the main trend on the 4 hour chart. The top trend indicator can show you the main trend direction and you also can draw a trend line. Now you switch to 1 hour or 30 min and take only trades in the main trend direction. This will help to avoid some less profitable trades.
What is the best moving average strategy for a 1 hour chart? ›
Using the 50-period EMA can tell you the support and resistance levels in the 1-hour time frame chart during the intraday trading. Compared to 20-day MA, 50-day period MA can give a better picture for formulating the next day's trading strategies.
Is 1 hour timeframe good for day trading? ›
30 minute (M30) chart: M30 is critical for planning trades that might last hours. It gives a high-level view of support and resistance levels that day traders need to watch. 1 hour (H1) chart: the H1 helps day traders look at intraday price movement and spot larger trends that can even spill over into the next day.
What is the 5 3 1 rule in forex? ›
The numbers five, three, and one stand for: Five currency pairs to learn and trade. Three strategies to become an expert on and use with your trades. One time to trade, the same time every day.
What is the 1 2 3 trading method? ›
The 123 setup consists of three pivot points. The confirmation of the 123 reversal pattern lays at Pivot Point 2. The target when trading a 123 formation is at a distance equal to the size of the pattern, applied beyond Pivot Point 2. Your stop loss should go beyond Pivot Point 3.
What is the first hour trading strategy? ›
The First-Hour Breakout strategy adds simulated orders based on the price range calculated for the first hour of the regular trading session. By default, it also compares the volume traded last night to the average nightly volume over the last five days (see the article on the Cumulative Overnight Volume for details).
What is the best timeframe to trade forex? ›
From experience, I can tell you that two of the best time frames to trade are the daily and 4-hour. This isn't to say that you can't be profitable trading a different time frame, but these two are what made me profitable as they work the best with the price action strategies I use.
What is the best timeframe for scalping? ›
Scalpers usually work within very small timeframes of one minute to 15 minutes. However, the one- or two-minute timeframes tend to be favoured among scalpers.
What is the 90% rule in forex? ›
One of the harsh realities of trading is the “Rule of 90,” which suggests that 90% of new traders lose 90% of their starting capital within 90 days of their first trade.
What is the 60 40 rule in forex? ›
The 60/40 Rule Explained
Forex options and futures contracts are considered IRC Section 1256 contracts for tax purposes. This means they are subject to a 60/40 tax consideration. In other words, 60% of gains or losses are counted as long-term capital gains or losses, and the remaining 40% is counted as short-term.
Traders alike must keep in mind that practice, knowledge, and discipline are key to getting and staying ahead in Forex trading.
- Define Goals and Trading Style.
- The Broker and Trading Platform.
- A Consistent Methodology.
- Determine Entry and Exit Points.
- Calculate Your Expectancy.
- Focus and Small Losses.
- Positive Feedback Loops.
Moving averages are one of the most basic yet effective trading strategies. They calculate the average price of a security over a specified period of time and smooth out price fluctuations, making it easier to spot trends.
What is the 1 minute entry strategy? ›
The 1-minute timeframe trading strategy involves making multiple trades within a single minute, aiming to capture small price movements. Traders use a 1-min scalping strategy to identify quick trading opportunities and rely heavily on technical indicators for entry and exit points.
What is 1 hour time frame swing trading? ›
1-Hour Chart
This is another popular chart for swing traders for the same reasons that people trade the 4-hour chart. But the problem here is that trading costs start to become a bigger portion of your profits—roughly double what you'd pay on the four-hour and daily timeframes.
What is the best simple moving average strategy? ›
Simple moving average strategy. There are many different trend-based strategies involving the simple moving average. Two of the most popular signals that traders look for are bullish crossovers and bearish crossovers. A bullish crossover occurs when a security's price moves back above the SMA after being below it.
