Select your preferred language
Language changes will apply immediately
Select your preferred language
Language changes will apply immediately
Advanced Strategies
"Explore powerful advanced strategies to enhance your trading performance, manage risks effectively, and achieve consistent success across forex, stocks, and crypto markets."
Wikilix Team
Educational Content Team
Have you ever thought about why one trader consistently seems to outperform everyone else while the others consistently seem to keep their heads above water barely? The answer typically lies in one thing: their strategy. Simple strategies can set you on your way. Still, the not-so-secret ingredient to being a successful trader involves simply becoming more involved in market price and pattern discovery as an advanced strategy.
In this article, we will explore several effective application strategies that professional traders employ to limit risk, uncover hidden opportunities, and maximize profitability. Regardless of whether you trade stocks, currencies, cryptocurrency, or commodities, the concepts discussed here can help you unlock your full potential as a serious trader.
Market context varies daily due to the influence of numerous factors, including market opportunities, breaking news, trade timing, and the psychology of traders, particularly about US data releases that precede those in other countries' capital markets.
Traders will find that relying on simple technical indicators will quickly wear thin, leaving them behind as they engage.
A professional trader will use advanced strategies, including:
• Open the mind to price movement.
• Recognize invisible setups.
• Increasing control over risk/reward.
• Increasing confidence with decision-making.
In short, advanced strategies eliminate guesswork and incorporate more probabilities into your engagement.
Multi-timeframe analysis deserves its category, as it may be one of the best advanced strategies available. Alternatively, ASY Trader can capture long and short trades with a straightforward trend following strategy. Professional traders monitor multiple price charts across various timeframes to engage with higher timeframes, enabling them to see the trend and all associated price action, whether it's a long or short trend-based price action.
How this will look is:
1. Looking at a higher timeframe (daily or weekly) to see and identify which way the dominant trend is going.
2. Shift to a medium timeframe (4-hour or 1-hour) to identify intermediate retracements.
3. Shift to the lower timeframe (15-minute or 5-minute) to fine-tune your entry and exit trades.
By looking at multiple perspectives, you increase your chances of having better-informed trades.
Fibonacci retracements and extensions are powerful on their own, but they get stronger when you add a confluence zone - where technical factors were aligned in multiple ways.
How To Use
• Draw Fibonacci retracements on significant swings.
• Then identify the levels where they overlap with historical support and resistance zones.
• Confirm by using candlestick patterns or momentum indicators.
Price is more likely to react strongly when you have multiple signals at the same price level, making them perfect zones for exits and entries.
Without risk management, even your best strategy will fail. One of the most overlooked advanced techniques is dynamic position sizing, or determining the optimal trade size based on volatility, account size, and risk tolerances.
Important Suggestions
• Always risk a fixed percentage per trade, generally anywhere from 1-2% of the account.
• Follow a volatility-based stop not to get stopped out and still collect profits.
• Enter the position over increments, rather than the last price point.
This helped protect capital and building consistency, especially going through periods of market uncertainty.
Knowing the structure of the market (how prices appear to form high, low, and consolidation) can be a critical component for advancing strategies. The phases of a trend are:
• Accumulation: Price moves sideways as buyers accumulate positions silently.
• Breakout: Price makes a strong move upward, indicating high demand for the commodity.
• Trend Continuation: In upward price movements, the market makes a higher high and a higher low, or vice versa for downward price movements.
• Distribution: Price does not have as much strength anymore, and this often signals a reversal.
Once you can identify market structure combined with a method like Fibonacci or moving averages, you can get into trades with a higher probability at play.
Breakouts occur when the price goes past an essential level of support or resistance - this is often an indication of strong momentum. However, not all breakouts are real; in fact, there are often more fakeouts meant to get traders to enter positions.
How do you determine which are fakeouts before they trap you?
• Confirm breakouts with volume spikes - strong moves occur when volume participation is increasing.
• Wait for a retest of the broken level (old support becomes new support or old resistance becomes new resistance).
• Combine with indicators like RSI or MACD to filter out weak moves.
This combination will minimize your false entries and allow you to capitalize on momentum-driven moves.
Professional traders rarely use just one form of analysis. The majority of trading strategies involve combining traditional technical setups with information derived from fundamentals.
Example:
• In forex, a Fibonacci retracement that lines up with a central bank decision is a high probability setup.• Earnings reports and bullish chart patterns in stocks are generally responsible for significant moves.
Combining the two of these viewpoints gives your trades buttressing support from market psychology and fundamentals.
In a volatile market, knowing how traders are feeling can be as pivotal as identifying what price charts are indicating. Indices of fear and greed, open interest, and options flow give insight into what other traders expect. When used alongside advanced indicators of sentiment like VWAP (Volume-Weighted Average Price) and volume profile, it can offer better anticipation of when market conditions have changed before it's observed in price action trades.
Advanced traders do not simply use gut feeling; they backtest their ideas heavily. Backtesting is applying your strategy to see how it trades under different market conditions with historical data.
The backtesting process looks like this:
1. Choose a market and timeframe.
2. Apply the strategy to at least 100 trades collectively in the past.
3. Track metric outcomes like the win rate, average reward-to-risk ratio, and drawdowns, and also rate your returns.
4. Refine and optimize as required by performance data.
The backtesting process builds trust in your execution of trades and assures that you are developing strategies based upon data, as opposed to emotion-based decisions.
Markets are ever-changing, and what works today in the market could perform poorly tomorrow. The best traders are lifelong learners and can adapt to different conditions.
Suggestions for staying Relevant
• Stay tuned in to the news and the rest of the world, and what is going on around it.
• Complete regular reviews and adapt your trading plan.
• Seek out trading communities and forums online to share ideas, perspectives, and whether some new perspective exists.
The ability to adapt is what separates professionals from amateurs.
Mastering advanced trading strategies is not just about memorizing a set of rules, but rather learning how to combine multiple tools of analysis, knowing market psychology, and having a solid understanding of risk management. By employing techniques such as multi-timeframe analysis, Fibonacci confluences, proper position sizing, and validating breakouts, you will have moved your trading from reactive to proactive.
No single strategy guarantees success; however, by stacking the probabilities in your favor, managing your capital responsibly, and remaining adaptable, you can create a consistent, sustainable edge in your trading in the markets.
Keep building your knowledge with our structured learning path. Each section builds upon the previous one.
This is the first section
You're at the beginning of your journey!
This is the last section
You've completed this course!
14 min
Reading time
Beginner
Difficulty
