Forex-ology Simplified – 5 Unorthodox Steps of a Winning Forex Strategy
First of all, I want to stress that this trading system of mine is no holy grail and anyone can use it to such high success rate if they follow the rules of the trading system. I have been trading for years and this is one of my forex trading strategies that have kept my consistency well.
I have always kept my trading systems simple because it’s the simple system that works in this ever-changing brutal currency market. Surprised by that? Did you ever think that a successful trading system has to be sophisticated and difficult to use? Doing well from the forex market depends on how effectively the trader himself uses the trading system and not how the trading system does the wonders.
So now I will reveal a forex strategy that I use very often to profit consistently from the market. After you read it, you might think that actually it’s such a simple system. But like I said earlier, trading should be simple, don’t complicate it. Below are the steps of my forex day trading strategy.
Step 1: Look at the main trend using daily chart. The first look from left to right of the chart should tell you it’s a down trend or up trend.
Step 2: After knowing what the main forex trend is, I will go to Forex Factory website to check for fundamental news release. If there is upcoming news 2 hours in front of me, I won’t even go to step 3 and onwards to look for trading signals because there might be whipsaws.
Step 3: If there is no news, I will have a forex trading plan. For example, if the main trend is up, I will only be looking for buy signals generated from my forex indicators, I will not look to selling. Vice versa if the main trend is down.
Step 4: Now this is the most crucial stage, my trading decision lies here. I use the crossing of 4 EMA (Exponential Moving Average) and 23 EMA to define buy and sell signals on the 30 minute chart. There are other indicators involved, the weekly pivot, Stochastic and MACD (Moving Average Convergence Divergence) must also follow the trend and cannot look flat. I filter whipsaws by trading only during high liquidity sessions and checking whether the trend is the same using 4 hourly chart. That’s all!
Step 5: The trade is set at a tight stop loss of around 35 pips while I have 2 methods of targeting profit. One is using healthy risk to reward ratio of at least 1:2. The second is using daily support and resistance.
That’s my successful forex trading system and it seems simple isn’t it? Of course risk management, money management and psychology should be combined in this trading system for it to work properly.
Watch the video related to forex strategy
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Help answer the question about forex strategy
What Is a Good Intraday Trading Strategy For Forex?Hi there,
What a strategy (system) do you recommend for an intraday Forex trader?
Please explain in detail and mention all the indicators, settings and … .
Best regards,
Vahid
http://www.weboma.com
About Author
Daniel S. -
About the Author:
To learn how to trade forex successfully using a simple, time-tested and proven forex trading system, download my FREE 56-page “Forex Trading To Riches” ebook at http://www.forextradingpower.com.
The author, Daniel Su, is the founder of http://www.ForexTradingPower.com where you can get free premium forex trading tips and resources. Daniel Su specializes in teaching real people how to trade the Forex market for long term financial success.
Tags: forex, Forex Day Trading Strategy, forex indicators, Forex Strategy, forex trading strategies, forex trading system, Forex Trend, trading
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May 15th, 2010 at 9:33 pm
Really a nice question …each and every individual is different ..so out of so many methods select your own …which is profitable and suits to your mind set ..seek assistance from any senior trader or stock guru and then stick on it and keep on modifying it till you wont succeed … If you are looking for the best forex software, visit this site
http://Make-Money-With-Forex.org/
This software is the best software that can help increase your trading profit and user friendly.
May 15th, 2010 at 9:45 pm
Take a year to learn as much as you can and then go very slowly. Anyone that suggests to you that there is a simple way to invest in FX that "works" is either not telling the truth or is ignorant.
Keep in mind that 95% of all new traders lose most of their money in the first 3 months of trading FX. Surely the success rate would be higher if there were any "formulas" that really worked.
May 16th, 2010 at 4:36 am
I've read a lot about Forex, but I've never seen a proven profitable forex strategy, despite the claims of some scam web sites. Playing Forex can appear alluring, but the majority of people who try it lose money. All you have to do is do a web search on the words "Forex" and "lose" to see this is the consensus.
Forex is what we call a "zero sum" game. You are making a bet with someone else about whether a currency will rise or fall. For every winner there has to be a loser. If you are smarter than the average player, you may make money. If you are dumber than the average player, you are likely to lose money. Most of the people making the "bets" in Forex are highly trained professionals at banks and other institutions. You are unlikely to beat them at this game.
Actually Forex is not quite a zero sum game. It's a slightly negative sum game as the Forex broker takes a small percentage each time in the spread. It's a small amount but over a hundred trades, it ends up being a considerable amount of money. So the average player is likely to lose money, and remember the average player is a highly trained professional and probably smarter than you.
There is a lot of luck in Forex, and if you play it, you will have some periods of time where you make money. This is usually because you are having a lucky streak, not because you have suddenly become an expert Forex player. However, most people are unwilling to admit their success is due to luck. They become convinced they have a system that works, and lose a lot of money trying to refine it.
Further complicating the problem is the large number of Forex scams on the internet. Most Forex websites are of questionable honesty. You will find many people on the Internet that claim they made a lot of money using Forex. They are usually liars trying to make money. They will say: "Go to Forexcrap . com/q2347." The "q2347" is a signal to the Forexcrap site that you are being referred to them by "q2347." If they sell something to you, "q2347" gets a kickback. These coded signals can be hidden by different methods in the link. Other people will refer you to their own private website or blog for the purpose of trying to get money off you.
I would recommend not trying to do Forex at all, unless you are a trained professional. It's like playing poker with people better than you, with the house constantly taking a small percentage from the pot.
May 15th, 2010 at 9:23 pm
check my channel for video’s about daytrading and trade like me in forex (EUR/USD, CAD/JPY etc.), stocks (coca-cola, phillips etc.), commodities (gold, silver, oil etc.) and indices (Nasdaq, Nikkei etc.
May 16th, 2010 at 6:25 am
If you’re a potential investment player who’d like to make it big in the business and financial world, then you go for forex trading. The FOREX, also known as the foreign exchange market is one of the largest financial markets in the world with and estimate of $1.5 trillion turn-overs every day. Here are a few strategies on how to make it big in the forex market.
Strategy One: Know your market. The best way to get advantage, earn profit and minimize losses is to familiarize yourself with the market and how the whole system works. In the forex market, the players are usually commercial banks, central banks and firms involved in foreign trade, investment funds, broker companies and other private individuals with large capital. With the speed and high liquidity of asset, most companies engage in this business than in any other trading venture. Transactions are done in a jiffy; there are no membership fees and there is always the allure and promise of big, big profit.
Trading is done in pairs. The most commonly traded currencies are usually the US Dollar, Japanese Yen, Euro, British Pound, Canadian Dollar, Australian Dollar and the Swiss Franc. The more commonly traded currency pairs are the US Dollar and the Japanese Yen, the Euro and the US Dollar, the Swiss Franc and the US Dollar. In Forex trading, everything is speculative and virtual. There is no actual product being sold or bought. The activity mostly consists of computed entries made on the value of one currency against another. Say for example, you can buy Euros with US Dollar, hoping that the Euro will increase it value. Once its value rises, you can sell the Euro again, thus earning you profit.
Strategy Two: Learn the language. There are three concepts you need to know in the currency market. Pips refer to the increase of one hundredth of a percent of the value of the currency pair you are trading. Usually each pip has a value of $10 or $1. Volume is the quantity or amount of money being traded at one particular time in the market. Buying is the acquisition of a particular currency. A trader buys with the hopes that the price of the currency will increase. Selling is putting a currency up for grabs in the market because of a potential or possibility of a decrease in its value. There are also two techniques of analysis usually used in this business – the fundamental and the technical analysis. Technical analysis is usually used by small and medium players. Here, the primary point of analysis revolves on the price. Fundamental analysis, on the other hand, is used by bigger companies and players with higher capital as it involves looking at the other factors affecting the value of a particular currency. In this type of analysis, the player also looks at the situation of the country, particularly issues like political stability, inflation rate, unemployment rate, and tax policies as these are seen to have an effect on the currency’s value.
Strategy Three: Develop a sound trading strategy. Your trading strategy would depend on what kind of trader you are. The basic thing with developing a trading strategy is to identify what kind of forex trader you are. A good trading strategy should lessen, if not, eliminate losses. Plan also the size of your transactions. It is better to conduct many different trades than one huge transaction. Not only does it develop discipline, but it also lessens any possible loss as only a fraction of the capital is affected. Part of a trading strategy is developing the values of discipline and proper money management.
Strategy Four: Practice. Try paper trading, a great way to practice your skills, see how the market works and get acquainted with the software and tools being used. There are online brokers who allow free paper trades, which allows practice and experience before doing it with real money.
Strategy Five: Choose the right forex dealer. Make sure that they are regulated by the law. Take not of dealers with investment schemes that give out too-good-to-be-true-just-false-hopes promises. Look at investment offers before getting started.
Forex trading may seem easy and manageable. But the emotional stress, the demands and challenges of being a forex trader requires more than just the knowledge of the market. It requires more than just a keen and sensible head for business. It’s all about a gameplan, a strategy.
May 16th, 2010 at 6:27 am
you might just as well look at that spam answer.
consider, the people that trade commodities are some of the smartest in the world.
if you're not in that exclusive group, you're going to lose.
but hey, it's your money.
go give it away.
wouldn't you think that if what you want is possible, everyone would already be doing it?
get real.
May 15th, 2010 at 10:31 pm
Free Forex EA- works perfectly fine for me..
May 16th, 2010 at 2:58 am
Can’t say how much i have benefited from your videos. Thanks!
May 16th, 2010 at 7:42 am
how much can you make with forex trading
May 17th, 2010 at 7:30 am
Asking people for a simple Forex strategy is like asking people if they have a simple method for playing poker that will allow you to win playing poker experts. There is no simple Forex strategy that works.
Forex is what we call a "zero sum" game. You are making a bet with someone else about whether a currency will rise or fall. For every winner there has to be a loser. If you are smarter than the average player, you may make money. If you are dumber than the average player, you are likely to lose money. Most of the people making the "bets" in Forex are highly trained professionals at banks and other institutions. You are unlikely to beat them at this game using a "simple" strategy.
Actually Forex is not quite a zero sum game. It's a slightly negative sum game as the Forex broker takes a small percentage each time in the spread. It's a small amount but over a hundred trades, it ends up being a considerable amount of money. So the average player is likely to lose money, and remember the average player is a highly trained professional and probably smarter than you.
There is a lot of luck in Forex, and if you play it, you will have some periods of time where you make money. This is usually because you are having a lucky streak, not because you have suddenly become an expert Forex player. However, most people are unwilling to admit their success is due to luck. They become convinced they have a system that works, and lose a lot of money trying to refine it.
Further complicating the problem is the large number of Forex scams on the internet. Most Forex websites are of questionable honesty. You will find many people on the Internet that claim they made a lot of money using Forex. They are usually liars trying to make money. They will say: "Go to Forexcrap . com/q2347." The "q2347" is a signal to the Forexcrap site that you are being referred to them by "q2347." If they sell something to you, "q2347" gets a kickback. These coded signals can be hidden by different methods in the link. Other people will refer you to their own private website or blog for the purpose of trying to get money off you.
I would recommend not trying to do Forex at all, unless you are a trained professional. It's like playing poker with people better than you, with the house constantly taking a small percentage from the pot.
May 17th, 2010 at 12:58 pm
The course and on-going commentary are really great. Thanks Nial.
May 17th, 2010 at 5:00 pm
I have great results with 100% Free EA
May 17th, 2010 at 11:03 pm
@OzTrader This got me so confused its like u was speaking in a foeign language.
May 18th, 2010 at 12:17 am
It’s called a candlestick chart. Check out steve nissen for more info on candlesticks.
May 18th, 2010 at 4:57 am
hello, Can you tell me how this chart is called?
May 18th, 2010 at 5:52 pm
Forex futures trading is a fluctuating (exciting) game, but these are some currency trades I'm watching right now:
- USD / JPY
- AUD / USD
- USD / CAD
- EUR / JPY
- GBP / JPY
- EUR / GBP
For some reason (call it a strategy if you want) I'm watching GBP / JPY. EUR / JPY too has seems to be showing some interesting movements…. but I don't want to give anyone any ideas. Mine your data, use the right tools, and work fast.
The futures market is about speed (and profit). Factor in historical currency trends and the nature of the global political landscape. That's the best strategy in forex futures trading.
May 18th, 2010 at 8:29 pm
http://www.FXCM.com
http://www.babypips.com/
Here is a couple good videos to watch,
http://www.forex.com/forex-seminars-developing-listen.html
http://www.forex.com/forex-seminars-developing2-listen.html
Here is a squido site for fxbootcamp that has several good video, if youll take the time to watch these you can learn a lot.
http://www.squidoo.com/fxbootcamp/
I like Oanda for a starting broker because you can trade with as little as 1 cent a pip on the line, of course youll only be making 1 cent a pip. then as you improve you can step it up a penny or a dime or what ever.
The only bad thing about them is 50:1 leverage and there spread gets very wide during news times.
I also agree with babypips good site.
a short but very good ebook
http://www.robbooker.com/books/Strategy10.pdf
Here is a good site to learn about the indicators. Just look all over it.
http://www.investopedia.com/university/movingaverage/default.asp
Use Oanda as a demo account. It doesn't expire so you will have as long as you need to practice.
http://fxgame.oanda.com
check out this guy: http://www.robbooker.com/
May 19th, 2010 at 6:58 am
I use a system called "forex autopilot". It's very good and there's a nice review for it at http://www.fxsystemscompared.com