If you want a simple forex trading system that makes money then we are going to give you one that you can get off the net for free. Best of all its easy to understand easy to apply and makes big profits so let’s look at it.
This system works on the following basis it buys “high and sells higher” while most traders look to “buy low and sell high”
Lets look at the theory and then how you can execute your trading signals.
1. The Logic & the Theory OF the System
Why buy low sell high doesn’t work
Its an accepted market wisdom and it doesn’t work. If you try and buy the low of a market you are guessing or hoping and the market will kill you.
However if you look for important breaks of resistance and an acceleration in price momentum, odds are the trend will continue and you can follow it for huge profits.
So why doesn’t every trader do this?
Because they want to buy the pullback and think they have missed a bit of the move (this is true but you needn’t worry about that if the price trend continues) they then wait, prices don’t pull back and they miss the move.
Its hard mentally to miss the start of the move, but if you grit your teeth and enter you will see a lot more profits come your way and be in on all the big moves.
Furthermore most of the big currency trends of the year start from new market highs NOT market lows.
So that’s the theory, this forex trading system is based upon.
Now lets see how to construct a system to trade breakouts.
You need to look for important resistance levels and this is normally a level that has been tested 4 times or more and repelled – in at least two separate time frames.
When this level is broken the odds favour the trend to continue your aim is to look at your forex charts and separate out the ones that are likely to continue.
You don’t need to guess or predict you look for confirmation.
2. Confirming Entry
What confirmation do you need?
You need to have confirmation that price momentum is accelerating and need some indicators to help you do this.
There are many momentum indicators but the best two are the stochastic and Relative Strength Index (RSI) and they discussed in our other articles.
Use these and make sure they BOTH confirm accelerating price momentum then enter your trade.
They will take a bit of practice but its well worth the effort and you will soon see how effective this combo is in confirming trade entry and exit levels.
3. Stop Loss Protection
Is simply below the breakout point once the level of resistance is broken it will then act as support.
Other Important Points of This Forex Strategy
Only trade breaks of resistance that are considered valid by the market - we have said four tests in two different time frames – but keep in mind, the more tests and the more time frames the better.
So you need to be patient – you can make 100% gains with this forex trading system trading just a few times a year.
If you like the action of forex trading this system is not for you – if you like profits it will give you them.
Also don’t trail the stop up to quickly LEAVE it as breakouts very often get re tested so you don’t want to be clipped out by volatility
That Seems Simple!
It’s a very simple system and that’s why it works.
Simple systems work best as they have few elements to break, also using breakouts is great because most traders can’t buy breaks as they want to buy low and sell high – don’t let that worry you though 95% of forex traders lose!
You can learn this system in under a week easily and test it.
Try trading this forex trading system for yourself in a free demo account and see the profit potential for yourself and target those triple annual digit gains you have always wanted!
I have given it to you free all you have to do is look it up on the net see the logic and try it and you will be surprised at how effective it is.
By Monica Hendrix
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment