7 winning strategies for trading forex Grace Cheng

  • 7 winning strategies for trading forex Grace Cheng 

    Have you ever heard of the name Grace Cheng? Her name is very popular among traders. She is one of the women traders who is also successful and famous with 7 winning strategies for forex trading which are revealed in her book.

    Grace Cheng is a woman who graduated from the National University of Singapore. Even though she is a woman, she does not make herself stay away from forex, even though she has a high interest in this industry.

    In my review, this time is about Grace Cheng and his 7 winning strategies for trading forex.

    Who is Grace Cheng?

    Before becoming a successful forex trader, Grace Cheng was just a woman who graduated from the National University of Singapore with a major in Biology.

    His basic education is very opposite to his interests. His desire is extreme so he can be financially independent.

    Her passion for achieving that goal led Grace Cheng to spend her time reading various investment books until she finally made sure she understood the fruits of forex trading.

    He prepares to achieve his goals carefully. Grace Cheng is willing to practice on a demo account before deciding to trade real.

    He is very interested in forex trading in major pairs such as EUR/USD and USD/CHF, as well as taking advantage of day trading strategies.

    With her successful strategy, Grace Cheng created a blog site that publishes her trading diaries at www.GraceCheng.com, but now this site inaccessible and forward to get.com.

    And it turns out that what happened was that the content on his blog was successful in attracting many blog site visitors from various countries, including America and Britain.

    Grace Cheng also plays a role in several media that are popular with many people, such as Technical Analysis of Stocks & Commodities, The Trader's Journal, The Forex Journal, Investopedia, and Smart Investors.

    Because of his popularity, Grace Cheng was then contacted by one of the British publishing companies, Harriman House, who offered to cooperate in making a forex trading book.

    7 winning strategies for trading forex grace cheng 

    In collaboration with Harriman house Ltd, Grace Cheng created a book entitled 7 winning strategies for forex trading. The book was published in 2007 and re-released in 2011.

    At the beginning of the foreword, Grace Cheng wrote her thanks to her husband Pedro and also his parents who always believed in him.

    He explained that the inexperienced trader's mistake is to focus too much on finding a strategy without loss but overriding important aspects to achieve success.

    According to him, there are three important factors in a trading philosophy called the three M's.

    • Mind.

    • Money.

    • Method.

    According to him, these three factors are very important to build success as a trader. Mastering the mind, and money management must be an important part of trading.

    Money is needed in the trade because this business requires capital.

    The method is a trading method or strategy that fully supports the trader to achieve success.

    Strategy 1. Following Market Sentiment

    Forex market is highly influenced by market sentiment, which influences traders' decisions according to their emotions, so traders must find and define this market sentiment.

    This technique is only one part of the overall trading strategy which usually involves entry and exit rules. However, following market sentiment can be the most important foundation in deciding trading decisions.

    Grace Cheng uses fundamental knowledge to find out the market sentiment, which she thinks can be identified in 3 types: bullish, bearish, and uncertain. Understanding of economic indicators was highlighted as the knowledge that traders need to learn to master this strategy.

    Not only to know the market sentiment, but Grace Cheng also recommends traders to measure their strength. The method he chooses to identify the strength of sentiment is by listening to the Commitment of Traders (COT) data release, and price movement analysis after an important fundamental data is published.

    Strategy 2. Riding Trend Or Trend Following

    Trend riding, or often known as the trend following is one of Grace Cheng's mainstay strategies. The Singaporean female trader admitted that she never fought how to anticipate changes in the direction of the trend so that she could catch the opportunity as early as possible. 

    Based on his experience so far, just following the established trend can give him a satisfying trading result.

    6 steps by Grace Cheng to execution in the trend riding strategy 

    1.  Define how long you want to hold the position. 

    This will determine the choice of a trading time frame that best suits your condition. According to Grace Cheng, 3 types of time frames need to be observed in trend riding strategies, namely large, medium, and small-time frames.

    High time frames represent long-term trends, while medium and small time frames each indicate the identification of medium and short-term trends.

    2. You have to be sure the current market sentiment is following the trend.

    To recognize and measure these sentiments, you can apply the strategy beforehand.

    While finding out the direction of the trend, you can use the trendline. In recognizing price trends, you should also understand the stages of trend formation which according to Grace Cheng occur in 4 phases: nascent (newly formed), fully charged (moving fast), slowing down, and ending.

    The success of identifying trends will make it easier for you to avoid wrong entry in the trend phase that is not very profitable.

    3 Observe trendline validity. 

    This can be seen from how often prices test the trendline. The more often the condition occurs, the more trendline is valid.

    4. Confirm the direction and strength of the trend.

    At this stage, Grace Cheng suggested using ADX indicators or oscillators such as Stochastic and MACD.

    5. Entry orders based on trends in short-term time frames.

    Shorter time frames provide you with details on price movements, thus it will be easy to manage risk by looking at potential support and resistance as well as the market sentiment that occurs.

    6. Place a Stop Loss at least 20 pips from the trendline.

    Stop-loss is a way to manage risk, it must be remembered that there is no perfect strategy without flaws, stop loss is the best weapon in defense.

    Strategy 3. Breakout Fading

    This strategy is in contrast to trading breakouts that are looking for profits from price breaks at important levels.

    Breakout fading identifies false breakout signals and tends to be aligned with the way of trading on sideways markets. 

    This strategy is very appropriate to be applied to a quiet market, with price movements that are not too volatile and relatively adhere to the limits of support and resistance.

    For entry orders, Grace Cheng recommends traders to rely on small time frames like H1. Meanwhile, Stop-Loss is better positioned 20-30 pips outside the range of support resistance.

    Strategy 4. Breakout Trading

    Almost all traders are interested in harvesting big profits in a short time. Breakout trading is included as the best strategy in forex trading. But in order not to get stuck with a false breakout signal, Grace Cheng confirmed signs of a breakout by looking at strengthening price momentum.

    Some of the ideal ways he calls can be used to find out the momentum are, observing the MACD histogram movement from level 0, paying attention to overbought and oversold RSI levels, and using signal divergence which can be obtained from the difference in price movements with MACD or RSI.

    Besides, ensure entry after the price is completely closed below support or above resistance, and knowing the market sentiment can also provide further confirmation to avoid false breakouts.

    Strategy 5. Breakout of Low Volatility

    Still around the breakout strategy, Grace Cheng this time emphasized taking opportunities when price volatility was receding. From here, you might wonder, why are you looking for opportunities when volatility is low? Isn't the potential very small compared to the breakout when the market is crowded?

    What you need to know here is, Grace Cheng is looking for opportunities only at the moment before the news release or important fundamental announcement. Thus, he can take advantage of changes in price volatility. 

    Technically, traders who have managed PowerFXCourse trading courses recommend the Bollinger Bands indicator application to detect volatility.

    Whereas to see the opportunity for a breakout, he uses a price pattern analysis and looks at the price patterns formed on the chart. If the price is forming one of the triangle patterns, then that is the best opportunity for entry with this strategy.

    Strategy 6. Carry Trade

    Categorized as a long-term strategy that aims to profit from positive swaps, Grace Cheng recognizes carry trades as a favorite strategy for big players in the forex market. 

    The key to the success of this strategy lies largely in the selection of trading pairs. This is because the pair with 2 currencies with different interest rates will provide more profits.

    Strategy 7. News Straddling

    The last best forex trading strategy mentioned by Grace Cheng is news straddling. As the name implies, this strategy is based on high-impact forex news, to find profit opportunities from large movements after the news release.

    Grace Cheng's recommendations for this strategy are:

    • Focus on major pairs, especially EUR/USD

    • Use the intraday time frame (H1 down).

    • Defined the support and resistance that form the price channel.

    • Put Pending Orders buy and sell above resistance and below support.

    • The entry is only at the desired price level. If that cannot be fulfilled because of the risk of requotes or slippage, you should not trade.

    • To minimize losses if both Pending Orders are touched, place Stop-Loss pending at a distance of 20 pips below resistance, and Stop Loss pending sell 20 pips above support. This is a manual solution that does not need to involve external plugins such as OCO Orders.


    The three M's, which are the factors for Grace Cheng's success, can be an inspiration to learn to apply, Mind, Money, and Method.

    Traders do not need to search and find the perfect strategy but forget about three important factors, Mind, Money, and Method.

    Mastering your mind, you will be more disciplined in applying the rules of a strategy and money management.

    If you are a beginner then do like Grace Cheng by studying from various investment books, and practicing in demo trading.

    The demo account is using virtual money but with real market conditions, this is very important as a beginner's initial preparation before a live account.