I've been a trader for 25 years and have noticed all kinds of market place and noticed plenty of innovations - but my forex trading strategy has NOT changed, it's nonetheless exactly the same as it was 25 years ago and nonetheless functions. I will share the logic of it with you here.
1st - we have noticed lots of adjustments within the final 25 years but have an understanding of this becoming clever and attempting to make your trading technique complicated can be a mistake. Uncomplicated systems function very best and always will.
Despite all the advances in technology over the last 25 years, the ratio of winners to losers still remains exactly the same 95% lose 5% win, this shows technologies has absolutely nothing to complete with forex success.
You need an easy system, since its pretty robust difficult ones fail due to the fact they have too many components to break.
Here is the logic of my system:
1. Look for Valid Assistance and Resistance
Yes very good old trend lines then, check for a valid level - lots of tests, in lots of time frames. Next I wait for the level to break and new high or low to be produced.
All the major trends come from breakouts and these are the moves to go for.
Most traders like to wait for the pullback but they in no way get in. By waiting for a much better value they miss the move. Losers don't go with breakouts winners do.
2. Confirm the Trading Signal
You then ought to see if the odds are on your side using the breakout so you check price momentum. You will find lots of momentum indicators to help you time your move and get the velocity of cost in your side. The ones you select are a matter of individual preference but I like the ADX, RSI and stochastic. If my momentum calculation adds up I go using the break.
3. Stops
Quit beneath the breakout point and then trail the quit up behind random volatility not to obtain clipped out I like the 40 day MA.
That is it! Uncomplicated yes of course but it functions for me. The genuine trick is being patient I only trade 1 - 2 instances a month with this process and to take brief term draw down trailing the cease.
Adapted to Swing Trading
If the marketplace just isn't trending, I adopt the technique to appear for shorter term moves and swing trade i.e making use of momentum to trade the moves between support and resistance. When performing this there's no trailing stop, just a target.
This method was just 1 I picked up from a commodity trader within the late seventies and following attempting all sorts of techniques, it's the 1 I settled on within the mid eighties and have employed ever given that. It functions on commodities currencies and stock indexes.
Author Resource:
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