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.