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Forex Trading Strategy - Ready your Chart



I'm able to think of few business endeavors that do not involve some sort of daily, weekly, or monthly planning. Trading Forex isn't any different. Whenever you take a seat to an unprepared chart you've little idea why one trade might run forever and another activates a dime.

This is easily solved by preparing your chart. The most frustrating thing about becoming an unprofitable Trader is never knowing why a trade worked to your benefit and why the next trade didn't. This can lead to an inability to determine where to trade from, when to take profit, where you can place your stops, so when to chop a losing trade. Inevitably, losing trades far outpace in both number and size the profitable trades. A prepared chart will allow you to take trades with less risk which translates to smaller losses and much more frequent gains.

The Forex trading strategy sections of every Forex forum website are probably the most popular. Be honest, if you are a unprofitable trader the number of hours do you spend reading the latest brain-fart from some who swears that because two trades worked that he or she has found the following best system.

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The main reason the forum strategy gurus always fail and can continue to fail is that they focus on all of the wrong things. They have a lot of rules and indicators and spend a lot time adjusting those rules and indicators they your investment most significant thing... it's where you trade from which makes a big difference.

Do this exercise and see what a difference it can make. I call this my " setup method #2." Pull-up a daily chart of the favorite pair. Zoom out until you can see 8 weeks worth of price data. For example, it's July now, so pull up a chart and ensure you can observe the daily candlesticks for May and June. Place a horizontal line at the a lot of June, the high of May, the low of June, and the low of May. You need to are in possession of a chart with four lines. There you have it!

Now wait until price approaches the region of one of your four lines. You are able to trade any timeframe, but only trade when price is approaching one of these simple four lines. Only take a trade when:

    Price is touching or is not far from your lines AND
    Your trading plan provides you with a signal.

Ignore all other signals that occur from wrinkles. As price approaches the areas on my pre-prepared chart, I look for simple price action candles, however, you may use candlestick patterns as well as that latest, greatest strategy you present in a Forex forum.

Doing this will permit you to trade less and trade from better places. See how much better the worst system performs whenever you take signals generated only if price is near an important place.