Weekly Forex Strategy

If you are restricted in terms of time but have a decent amount of capital, you might consider a weekly forex strategy. This means you would only need to take a few minutes each week to check for any buy or sell signals. You can also catch some big currency pair moves that tend to be more obvious on the weekly charts as they remove a lot of the noise that you can get when day trading forex on lower chart timeframes. However, it does mean there will be less trade setups so you might not be able to compound an account as quick as some other forex strategies such as scalping.

Weekly forex trading strategy

In my opinion, trend trading the weekly forex charts makes the most sense. As you will not be trading that often, you might want to try and get into long term trends. Yes, you could take short term trades on the weekly charts but you would need lots of good trades to make the same amount of pips as you could from riding a big trend until the end.

The main disadvantage being that we need to know how to identify the trend and how to time the entry or exit. For that, we will use a combination of technical analysis and price action analysis. You should also be aware of the fundamentals such as economic news releases, although they don’t usually have the same impact on weekly strategies as they would say on a 5-minute strategy or 1-hour strategy.

Weekly forex strategy buy signal

  • 50 SMA is above the 200 SMA
  • Price is above both moving averages
  • ADX main line is above 20
  • ADX +DI is above -DI
  • Price breaks out above resistance
  • Bullish price action

You can see in the USD/JPY weekly chart below that the 50 moving average was above the 200 moving average, showing a golden crossover. Price was also above both moving averages and breached a recent support level that had been holding up quite well. The ADX was showing strong upward momentum and we had bullish candlestick patterns including hammers and engulfing bars. Stop loss could have been just below the 50 SMA which is around 200 pips which sounds high but isn’t bad when you consider price moved almost 4,000 pips in an uptrend.

Weekly Forex Strategy Buy Signal
Weekly Forex Strategy Buy Signal

Weekly forex strategy sell signal

  • 50 SMA is below the 200 SMA
  • Price is below both moving averages
  • ADX main line is below 20
  • ADX -DI is above +DI
  • Price breaks out below resistance
  • Bearish price action

In the GBP/USD weekly chart below, you can see that the 50 SMA had crossed the 200 SMA, showing a death crossover. Price was below both moving averages and broke through a recent support level. The ADX indicator had just started to show strong downwards momentum which suggests this was the start of a big move down. The trade was confirmed with bearish candlestick patterns including shooting stars. A stop loss just above the 50 moving average would have been around 250 pips which gives a favourable risk to reward ratio when you consider that price fell almost 3,500 pips from entry. We could have locked in the trade and break even and trailed the remainder of the position to make the most of this bear market.

Weekly Forex Strategy Sell Signal
Weekly Forex Strategy Sell Signal

Advantages of weekly forex charts

  • Less time analysing charts
  • Catch some big currency pair trends
  • Filters out some of the forex market noise
  • Can be used on any currency pair
  • Lots of technical indicators to choose from
  • Less forex trading fees to pay

Disadvantages of weekly forex charts

  • Infrequent trading
  • Requires wider stop loss
  • Needs good money management
  • Must time entry and exit well

Conclusion: is it worth trading weekly currency pair charts?

Yes, if you don’t have much time to dedicate to trading forex and prefer to hold positions for a long period of time, trading the weekly forex charts can be a great solution. It requires less chart watching but you will need some patience as trades can be few and far between. You can save on trading costs as you will not be paying your broker over and over again for taking lots of positions.

As with any forex strategy, you should have good trading discipline and forex money management. This can be the difference between a winning and losing strategy. I have seen the exact some weekly forex strategies produce a different set of results simply due to the stop loss and take profit levels being used. Try not to let negative emotions such as fear, anger and greed get in the way.

Before making a commitment, you could always practice your weekly forex strategies on a demo account. Most forex brokers will provide these free of charge, including IC Markets. They have tight spreads, low fees and quick execution speeds. Once you start seeing some consistent results, you could always make the seamless switch over to a live forex account.