A ‘Best of’ Momentum Trading Strategy
‘Best of’ momentum trading strategy has become foremost strategy used in current markets. It serves more reliable result and more measurable method. It basically suggests us to buy rising up assets and to sell going down assets. If you are new and you want to use this strategy, there are few factors you must not forget.
It Works in Pairs and Crosses
Just as expected, the pairs and crosses refer to those exist in recent seven global currencies. How to choose among them? We need to monitor the price movement. We only need around six pairs or crosses that move aggressively during the last thirteen weeks. Once we are focusing on them, we need to identify the most distinctive value among pairs. The lowest and highest movement will be ones we are going to play at. If you are accustomed to monitor market price movement, this part shouldn’t be too complicated. We need to take time though before deciding.
Weekly Calculation is Best
As mentioned before, we need the thirteen weeks period or around three months. During the period, we closely monitor the price changes and how they change. We need to provide specific spreadsheet and note the change. Weekly change will represent the best value in the simplest way. We will evaluate thirteen changes before we finally make the decision. There is no official template of the spreadsheet, but we need to write down any important details concerning on the changes.
Also read: How to open a forex account
Across Currency Wise
Playing among currencies will provide better chance for us trader. We don’t have to play with all of them, making it a more difficult work. During the monitor, we should also pay attention on the currencies changes. As always, we only need pairs that move actively during thirteen weeks. Find the largest amount of change between the pairs, and trade on its movement. Some people may suggest you that specific pair appears to be dynamically change from time to time. This is a great suggestion, but market can be surprising, and we need to closely look at other pairs too.
How to Avoid Loses
In this strategy, we have options to avoid loses. One of the best ways will be make a move on average range. Basically, within twenty days, we need to evaluate the position. If we have one fix position, we need to consider earning profit from split position, saying three different positions. In alternative, we can also change the level of lose stop for profit margin. Manual stopping is also advisable but it takes experience to do that. We can also combine the ways to generate better position in the end of the trade.
This strategy has been used for more than seven years now. Many traders already see its awesome work. However, even though you already know the most important factors in it, you need to learn the whole system in detail and make a trial. Practice makes perfect. Only then, you can really use the ‘best of’ momentum trading strategy optimally.