FOREX One Hour Trading Strategies

Thousands of aspiring traders come to the foreign exchange (or "forex") markets each year to earn their fortunes day-trading, but many find it boring to stare at a computer screen all day long. For a much easier alternative, try one of the many reliable forex one-hour trading strategies that just utilize price charts, trading volume, and moving averages.

Setting Up Your Trading Station
Log on to a free charting service, like FreeStockCharts.com. Arrange a chart that will simultaneously display the symbols of the currencies you are interested in and their respective hourly prices. To achieve this on FreeStockCharts.com, click the "New Chart" tab at the top of the screen twice. Two price charts will pull up; design one as a "quotes" charts, where all the currency-pairs symbols will be input, and make the other a "price" chart, where hourly price action will be displayed. Link the two screens by pressing the upper right-hand tab in each screen. You can now see corresponding price action while scrolling through your quotes.

Using Moving Averages
Research moving averages. To do this on FreeStockCharts.com, click the "Indicator" tab on the price chart's screen and select the five-period SMA (simple moving average), the 15-period SMA, and the 34-period SMA. Moving averages can help you spot an upward trend in the forex price action. You want to see price action and the MAs both moving up. Make sure to confirm the trend you've spotted by checking it against the moving averages for all three time periods.

Adding Trading Volume
Research trading volume. To do this on FreeStockCharts.com, click on the price chart's "Indicator" tab and select "Trading Volume," which will be displayed on the price chart. An increase in volume and price means more buyers are coming into that particular forex, and the price will be driven higher. Conversely, a decline in volume for a forex with a flat or declining price means that the price will not be driven up.

Hunting Trades
Scan through the currency symbols on the hourly price chart, looking for upward trends. Once you've spotted a forex on an upward trend, wait until the price pulls back to either the five- or 15-period SMA (while staying above the 34-period SMA) and the forex is trading at low volume. Locate the hourly price bar that sets the lowest low; when the price trades over the high of that bar on higher trading volume, enter the trade in the direction of the upward trend.

Risk Control and Profit Taking
Set your stop-loss point below the price bar that set the significant low. Calculate your risk by subtracting the stop-loss point from your entry price. Exit the trade if the price hits your stop-loss point or if it hits your profit target, which should be three times your initial total risk. For example, if your risk is $100, then your profit target should be $300.