First of all, I want to emphasize that this trading system of mine is not the Holy Grail, and anyone can successfully use it by following the rules of the trading system. I have been trading for years and this is one of my forex strategies that has helped me make a profit consistently.
I have always kept my trading systems simple because it is a simple system that works in this ever-changing hard currency market. Surprised by this? Did you think that a successful trading system should be sophisticated and difficult to use? Success in the foreign exchange market depends on how effectively the trader himself uses the trading system, not on how good the trading system is.
So now I will reveal a forex strategy that I use very often to constantly profit from the market. After reading, you may think that this is actually such a simple system. But as I said before, trading should be simple, don’t complicate. The following are the steps of my forex trading strategy:
Step 1: Look at the main trend using a daily chart. A first look from left to right on the chart should tell you that this is a downward or upward trend.
Step 2: After learning what the main trend of forex trading is, I will go to the Forex Factory website to check for news. If in 2 hours there is future news, I will not even go to stage 3 to look for trading signals, because there is a high probability of whips.
Step 3: If there is no news, I will implement my foreign exchange trading plan. For example, if the underlying trend increases, I will only look for buy signals that are generated from my forex indicators, and vice versa if the underlying trend decreases.
Step 4: Now this is the most important stage and my trading decision lies here. I use the intersection of 4 EMAs (exponential moving averages) and 23 EMAs to determine buy and sell signals on a 30-minute chart. There are other indicators, weekly pivot, stochastic and MACD (divergence convergence moving average) should also follow the trend and may not look exactly. I filter visa instruments by trading only during high liquidity sessions and checking to see if the trend is the same using a 4-hour chart. That’s all!
Step 5: Trading is set on a hard stop loss of about 35 points, while I have 2 methods of profit orientation. One uses a risk-reward ratio of at least 1: 2. The other is the use of daily support and resistance.
This is my successful foreign exchange trading system. It’s simple, isn’t it? Of course, risk management, money management and psychology must be combined in this trading system to make it work properly.