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1 Hour Forex Strategy

1 hour forex trading strategy

Learn to Swing Massive 10:1 Ratio trades

I love 1 hour Forex strategy setups. If you are reading this article, you are likely a swing trader. Swing trading is an excellent compromise between a good profit potential and not so much time needed to dedicate looking at the charts.

They can take time to form, but they give you massive 10:1 risk-reward ratios or sometimes more.

As swing traders, we look for opportunities in the 1-hour candle charts and patiently wait until the market gives us the best possible conditions. The best part is that you can do this once a day, when you come back home, or even once every other day. That’s enough to find profitable setups with a reasonable probability of success.

I also know many traders who day-trade or even scalp but have some swing positions open to play the more significant movements of the markets, and let’s face it, as traders, we always feel compelled to participate in some way in the action; swing trading is involved but not so much that it won’t let you time to do other things in your day.

Pros of 1-Hour Swing Trading Strategies:

  • It’s not as involved as day trading or scalping.
  • Profits can be monstrous if you catch a good trend and have the discipline to stay in your position.
  • Setups are generally easy to identify and execute since entries are not so time-sensitive.
  • Spreads and slippage are usually not a big problem. A few pips against you won’t make a big difference in the overall trade.

Cons of 1-Hour Swing Trading Strategies

  • 1 hour Forex Strategy setups require patience. And that can play with your psychology if you are eager to participate in the markets.
  • Depending on your strategy, you can look at charts for days or weeks without a good setup.
  • You have to be mindful of your stops and never forget to set a stop-loss order since you won’t be babysitting the trade, but you will most likely come at the end of the day to see how it is going.
  • Be aware of important news events that can generate wild market swings, and always keep the economic calendar in mind. Those news-driven swings can devastate your account if stop-losses are not in place. Especially if they happen during the night while you sleep or do other things.

If you are conscious of the challenges and limitations of these strategies, you can make significant profits while enjoying your life by not being glued to the screens watching every pip move. That’s why I am a big fan of 1-hour setups.

A Sample Trading Setup

I will discuss a setup for 1-hour swings that I have used in the past and find interesting. Please remember to backtest and try on a demo account before committing any real money.

And, as always, risk only the money you are willing to lose, worst-case scenario.

  1. Take any Forex pair you plan to trade and go to the 1-day timeframe.
  2. Draw the most relevant SUPPORT and RESISTANCE lines
  3. Establish the trend on the weekly time frame chart
  4. Wait for a setup on the 1-hour timeframe (I will use double top and candle confirmation)
    • You will have to monitor several pairs, maybe once or twice a day.
  5. Set your stop loss above the relevant line
  6. Set your target at a relevant 1-hour support or resistance line
  7. Aim for at least a 4:1 risk-reward ratio

TRADE MANAGEMENT

  1. Move your stop to break even when passing a relevant 1-hour line.
  2. Trail or take profit depending on your personal strategy and risk tolerance

1 Hour Forex Strategy Trade Setup sample:

  1. Take any Forex pair you plan to trade and go to the 1-week timeframe. GBP/USD in this case:
1 hour Forex Strategy preparation
GBP/USD 1 hour trade, starting from the weekly time frame is ideal for a swing trader

2. Draw the most relevant SUPPORT and RESISTANCE lines

swing trader preparation
GBP/USD Resistance line

3. Establish the trend in the weekly time frame – Range bound, in this case, are also suitable for 1 hour forex strategy setups.

1-hour forex trading range bound
  1. Wait for a setup on the 1-hour timeframe (I will use double top and candle confirmation)
    1. You will have to monitor several pairs, maybe once or twice a day.
1 hour Forex Strategy outcomes for swing trader
GBP/USD Doube Top on the 1-hour timeframe

Remember when trading this 1 hour forex strategy that the support and resistance you draw weekly are not as exact; use them more as AREAS of support and resistance. When entering the trade, give it plenty of leeway in your stop-loss.

You can enter the trade when you see some bearish candle confirmations after the double top.

Since we are working with larger timeframes on swing trades, 30 – 60 pips are OK.

We are swinging for a 10:1 reward ratio, extracting a massive profit.

Conclusion:

These 1-hour forex trading setups can be applied in any market since they are based on classical patterns. Be aware of the news, so you don’t get stopped. As always, mind your position sizing; it may take a couple of tries before the trade goes your way. Don’t let that be deterrence, and stick to your guns until the trade is proven invalid.

Please ask any questions, and don’t forget to subscribe to get regular actional strategies and Forex-related information.

2 thoughts on “1 Hour Forex Strategy”

  1. Hi Paul, ever since I looked into forex, you are the first person to actually break down things into simple terms, so grateful for this and happy to see what the future holds, Kind regards •
    Marc

    1. Thank you for your comments, Marc. I wish you a lot of success in your trading. Let me know if you have any questions regarding the 1-hour forex strategy.

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