Forex Trading Strategy - A 3 Step Method for Success
by kelly Price
Here we will outline a simple way to make money with a forex strategy anyone can learn and apply in a few days and it works. Let's look at this forex trading strategy in more detail.
First things first
The key to currency trading success is a simple robust method combined with discipline.
If you don't understand how and why your method works you will NOT be able to apply it - that's why you have to learn it yourself. faxless payday loans
Currency trading success comes from within. faxless payday loans
Now how do you trade?
1. Methodology
The first point is you need a simple robust method - simple systems work far better than complicated ones as there are fewer elements to break. faxless payday loans
The best system to use is a breakout system, based upon support and resistance and confirmed by momentum. faxless payday loans
2. A Forex Trading System
How should your system work?
Firstly, forget all about the idea of buying low or selling high it doesn't work in the real world of forex trading - the best way to trade is to buy breakouts to new highs or lows. Most big trends start from these breakouts and the odds are in your favour.
Trade breaks of valid resistance (the more test the better) and if possible in two different time frames spaced by weeks or months and the more periods the better.
When a break occurs you want to go with it. How do you decide?
You look at forex price momentum. faxless payday loans
If you don't know about momentum indicators are, now is the time to start.
Get one or two you like - we favour the RSI and stochastic and you can look them up in our other articles.
If price momentum supports the move you are not guessing or hoping the move will continue - you are trading the confirmation. faxless payday loans
Stop is then below the breakout point.
That's nice and simple then and it is - but breakout logic is timeless; most traders want to wait for pullback but on the big moves they don't come and their left missing the move - don't make the same mistake. faxless payday loans
If momentum supports the break execute your trading signal on your forex chart and go with it. faxless payday loans
Money Management & Discipline
You are only trading valid breaks of support or resistance and these normally lead to big trends so you keep your stop back - Do not trail too soon. When you do, make sure you keep your stop outside of normal daily volatility.
This system is based upon breakout methodology which works and is easy to understand.
You can also see why the bulk of traders don't do it.
You have to buy highs or sell a low which requires discipline - but if you want to make money and you have confidence in your forex trading system, then you will do it.
The fact is if you want to succeed remember this equation:
Robust simple system + Applied with discipline = forex success
You need both to come together in your forex trading strategy, to enjoy currency trading success.
It may be simple but that doesn't mean it doesn't work - it does. Furthermore, it should only take 30 minutes a day or less to apply and execute. faxless payday loans
Forex traders constantly want to predict (this means hoping or guessing ) and lose, they also want to buy low or sell high - but this is not possible and also if you do it, your not trading high odds trades. A simple breakout system, you understand and can apply with discipline works best. faxless payday loans
Try basing your forex trading strategy around the above and you could win big at forex trading faxless payday loans
Showing posts with label Forex Trading Systems. Show all posts
Showing posts with label Forex Trading Systems. Show all posts
Monday, March 2, 2009
Forex Trading Systems - Are Computers Better Than Humans?
Forex Trading Systems - Are Computers Better Than Humans?
by kelly Price
Can you really make money by following a computerized forex trading system? Well a while ago I bought one and knew the vendor and knew one of his clients made $1.4 million with it REAL MONEY in just a few years. Now that sounds great - but there is a catch with computerized trading systems ... faxless payday loans
The catch is executing them - let me explain this in more detail.
I bought the system and it consisted of one parameter and that was it. The logic was easy to understand and you could see why it worked longer term - but do you know what?
I couldn't execute the system in line with the signals and this is a common problem.
My reason was it was at the start of my trading career and I was trading money I couldn't really afford to lose - I put my own input in ruined the system and got my reward - a huge loss. faxless payday loans
Serves you right you may say and yes it did - but there are other related problems why traders lose. faxless payday loans
Most of the Systems Sold Are Junk
I know now with my experience of trading 99% are junk and will never re produce the gains they make on track records presented - Why?
Well at least on the one I traded had a real time track record - but most sold today, are by marketing companies who simulate in hindsight a track record - well we can all do that knowing the closing prices! faxless payday loans
They are normally based upon rules that are not revealed, or rules that have been curve fitted (if you don't know what curve fitting is look up my other articles) and the trader who thinks he will get rich for a few hundred bucks or so gets wiped out - lesson learned.
To trade a system, you really need to look for a real time track record but even with this, you face a problem:
Drawdown
Drawdown is the problem with any system. Those losses on paper, don't hurt like they do when you lose real time. faxless payday loans
If you are following a forex trading system always assume the worst drawdown is ahead (and very few good ones drawdown by less than 30%) so, when studying the track record, don't look at average drawdown, look at worst peak to valley drawdown in amount and period of recovery and accept that's going to happen - that way things can only get better.
Following the markets
If you follow a purely mechanical trading system don't watch the news!
Whilst we know its wrong and reflects the herd, when your trading system opposes those sensible news stories, you have a problem of discipline and believe me, those news stories can frighten the hell out of you and make you feel dumb for following even the best systems.
Pay to much attention and you are tempted to interfere with the system and that means the end of your system. faxless payday loans
Following mechanical trading systems is hard and you must be disciplined at all times.
You need to ignore the news, accept drawdown cheerfully and understand the system logic and ideally to instil confidence, have a real time track record, to know the system has at least worked and is based upon sound logic. faxless payday loans
If you can do the above, then mechanical systems are a great way to make money.
If you cant, then you should devise your own with as much human input as necessary, to make you feel comfortable. faxless payday loans
The system I traded on and lost, won for many people and its logic is timeless - but I made no money with it which taught me one of the biggest lessons of my Forex trading career.
by kelly Price
Can you really make money by following a computerized forex trading system? Well a while ago I bought one and knew the vendor and knew one of his clients made $1.4 million with it REAL MONEY in just a few years. Now that sounds great - but there is a catch with computerized trading systems ... faxless payday loans
The catch is executing them - let me explain this in more detail.
I bought the system and it consisted of one parameter and that was it. The logic was easy to understand and you could see why it worked longer term - but do you know what?
I couldn't execute the system in line with the signals and this is a common problem.
My reason was it was at the start of my trading career and I was trading money I couldn't really afford to lose - I put my own input in ruined the system and got my reward - a huge loss. faxless payday loans
Serves you right you may say and yes it did - but there are other related problems why traders lose. faxless payday loans
Most of the Systems Sold Are Junk
I know now with my experience of trading 99% are junk and will never re produce the gains they make on track records presented - Why?
Well at least on the one I traded had a real time track record - but most sold today, are by marketing companies who simulate in hindsight a track record - well we can all do that knowing the closing prices! faxless payday loans
They are normally based upon rules that are not revealed, or rules that have been curve fitted (if you don't know what curve fitting is look up my other articles) and the trader who thinks he will get rich for a few hundred bucks or so gets wiped out - lesson learned.
To trade a system, you really need to look for a real time track record but even with this, you face a problem:
Drawdown
Drawdown is the problem with any system. Those losses on paper, don't hurt like they do when you lose real time. faxless payday loans
If you are following a forex trading system always assume the worst drawdown is ahead (and very few good ones drawdown by less than 30%) so, when studying the track record, don't look at average drawdown, look at worst peak to valley drawdown in amount and period of recovery and accept that's going to happen - that way things can only get better.
Following the markets
If you follow a purely mechanical trading system don't watch the news!
Whilst we know its wrong and reflects the herd, when your trading system opposes those sensible news stories, you have a problem of discipline and believe me, those news stories can frighten the hell out of you and make you feel dumb for following even the best systems.
Pay to much attention and you are tempted to interfere with the system and that means the end of your system. faxless payday loans
Following mechanical trading systems is hard and you must be disciplined at all times.
You need to ignore the news, accept drawdown cheerfully and understand the system logic and ideally to instil confidence, have a real time track record, to know the system has at least worked and is based upon sound logic. faxless payday loans
If you can do the above, then mechanical systems are a great way to make money.
If you cant, then you should devise your own with as much human input as necessary, to make you feel comfortable. faxless payday loans
The system I traded on and lost, won for many people and its logic is timeless - but I made no money with it which taught me one of the biggest lessons of my Forex trading career.
Subscribe to:
Posts (Atom)
