Forex King Strategy: A Comprehensive Guide

Table of Contents

The Forex King Strategy is a trend following system that utilizes multiple time frame analysis and exponential moving averages to identify high-probability trading opportunities. Developed by a trader known as the “King of Forex”, this strategy aims to catch big moves in the market.

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Overview of the Strategy

The core components of the Forex King Strategy are:

Exponential Moving Averages (EMAs) – The 9, 20, and 50 period EMAs are used to determine the trend direction and identify potential entries. The EMAs act as dynamic support and resistance levels.
Multiple Timeframe Analysis – The strategy analyzes the daily, 4-hour, 1-hour, and 15-minute timeframes to identify the overall market structure and high-probability setups.
Trend Following Approach – Trades are taken in the direction of the prevailing trend. Buy signals occur when the shorter term EMAs cross above the longer term EMAs and sell signals when the shorter term EMAs cross below.
Strict Risk Management – Only risking 1% of the account per trade and utilizing stop losses helps limit losses during losing streaks.

How the Forex King Strategy Works

The Forex King Strategy for MetaTrader 4 is categorized as a trend following system because it aims to enter trades in the direction of the major trend. It makes use of exponential moving averages to determine the trend structure and identify potential reversals early.

Here are the key steps when using this strategy:

Analyze the higher timeframes like the daily and 4-hour charts to determine the major trend direction. For an uptrend, the EMAs would be stacked with the shorter term EMAs on top and for a downtrend vice versa.
Head down to lower timeframes like the 1-hour and 15-minute charts to spot high-probability entries and manage trades.
Go long when the 9 period EMA crosses above the 20 period EMA and the 20 period EMA is above the 50 period EMA. Place stop loss below recent swing low.
Go short when the 9 period EMA crosses below the 20 period EMA and the 20 period EMA is below the 50 period EMA. Place stop loss above recent swing high.
Target a risk to reward ratio of at least 1:2. Move stop loss to breakeven once price moves in favor by the intended risk amount.
Trail stop lower for longs and higher for shorts to lock in profits as the trend extends. Close partial positions at key levels.

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Benefits and Drawbacks of the Strategy

Some benefits of using the Forex King Strategy are:

Dynamic Support and Resistance Levels – The EMAs act as tradable levels that shift with price action.
Filters Out Market Noise – Smooths out price data and ignores small counter-trend moves.
High Win Rate – Produces a high probability trading setup during strong trends.
Risk Management Focused – Predefined stop loss and take profit levels.

However, some drawbacks include:

Requires Multiple Timeframe Analysis – More work and observation needed.
Lagging Indicators – EMAs are reactive and can produce late signals.
Vulnerable to Whipsaws – Too many false signals during range-bound markets.
Not Ideal for Scalping – Works best on higher timeframes like 1-hour and 4-hour.

Tips for Effectively Using the Forex King Strategy

Here are some tips to use the Forex King Strategy effectively:

Trade with the major trend – Look for buying opportunities in uptrends and selling opportunities in downtrends.
Use a stop loss on every trade – Helps manage risk on every trade. Risk only 1% of capital per trade.
Book partial profits – Scale out of winning trades at key levels to lock in gains.
Be patient with trades – Let winning trades run and don’t exit too early. Avoid overtrading.
Adjust stop to breakeven – Once price moves in your favor by the amount risked, adjust stop loss to breakeven.
Trail stop behind price – Trailing stop can secure larger gains as the trend extends.

The Bottom Line

The Forex King Strategy aims to capitalize on strong trends in the market by using exponential moving averages. It provides clear entry rules and solid risk management guidelines. However, traders must be careful with whipsaws and be selective with trading setups. Overall, it is a robust system that can produce consistent profits over time with proper execution. Combining good money management and patience is key to success.