This Simple Forex Strategy Is Amazingly Profitable
Are you a relatively new trader looking for a solid forex strategy?
Many newer traders face the challenge of trying to identify the trend on the intra-day level in order to make their Forex strategy work.
Using an Exponential Moving Average, specifically the 200 EMA can provide the solution.
In surveys it was found that Forex traders all around the world vote the 200 EMA as one of their top indicators. So that is reason enough to use it considering the psychological effect it can have once price starts getting within spitting distance of the 200 EMA.
The Simple 200 EMA Strategy
Start using this effective Forex strategy by setting up charts on three different time frames:
4 Hour Chart
1 hour
15 minute
Now plot a 200 EMA indicator on each chart and, as a suggestion, color it red, for easy visual impact.
Some like to tile the 3 chart windows in a vertical style so it is easy to compare them side by side. It can distort the chart a little but for this strategy you don't really need to see the chart in full screen mode.
Now it's simply a matter of browsing through the currency pairs you have chosen to trade.
If you prefer to trade only pairs with a smaller pip spread, they amount to about 9.
Here's a list:
EUR/USD | GBP/USD | USD/CHF | USD/JPY | EUR/JPY | USD/CAD | AUD/USD | NZD/USD | EUR/CHF
Search through and see if price is going against the 200 EMA on the 15 minute chart on any of the currency pairs.
Using the EUR/USD pair as an example, check where price is relative to the 200 EMA on the 4 hour, 1 hour, and 15 minute charts.
If price is well above the 200 EMA on the 4 hour chart, well above the 200 EMA on the 1 hour chart, but BELOW the 200 EMA on the 15 minute chart, price is bucking the trend.
So price is temporarily going against the overall trend and is in a retracement mode.
You now need to look for a good entry point to get into the market in line with the basic principle of buying the dips in an up trend while selling the rallies in a down trend.
Using the EUR/USD example, you would look out for a distinctive candle that would indicate possible price exhaustion as it bucks the trend on the 15 minute chart. The probability is it would soon resume moving in the direction of the trend.
This is an easy exercise and it can be done once or twice a day, taking just a few minutes.
Look Out For Price Going Against The Trend
As soon as you see price crossing the 200 EMA on the 15 minute chart whereas it is well beyond the 200 EMA in the opposite direction on the 4 and 1 hour charts, FOCUS! Snatch the opportunity to get into the market and make a profit.
See for yourself how effective this simple Forex strategy is. Practice it for a short time and then, once convinced, add it to your Forex trading tool kit. - 23167
Many newer traders face the challenge of trying to identify the trend on the intra-day level in order to make their Forex strategy work.
Using an Exponential Moving Average, specifically the 200 EMA can provide the solution.
In surveys it was found that Forex traders all around the world vote the 200 EMA as one of their top indicators. So that is reason enough to use it considering the psychological effect it can have once price starts getting within spitting distance of the 200 EMA.
The Simple 200 EMA Strategy
Start using this effective Forex strategy by setting up charts on three different time frames:
4 Hour Chart
1 hour
15 minute
Now plot a 200 EMA indicator on each chart and, as a suggestion, color it red, for easy visual impact.
Some like to tile the 3 chart windows in a vertical style so it is easy to compare them side by side. It can distort the chart a little but for this strategy you don't really need to see the chart in full screen mode.
Now it's simply a matter of browsing through the currency pairs you have chosen to trade.
If you prefer to trade only pairs with a smaller pip spread, they amount to about 9.
Here's a list:
EUR/USD | GBP/USD | USD/CHF | USD/JPY | EUR/JPY | USD/CAD | AUD/USD | NZD/USD | EUR/CHF
Search through and see if price is going against the 200 EMA on the 15 minute chart on any of the currency pairs.
Using the EUR/USD pair as an example, check where price is relative to the 200 EMA on the 4 hour, 1 hour, and 15 minute charts.
If price is well above the 200 EMA on the 4 hour chart, well above the 200 EMA on the 1 hour chart, but BELOW the 200 EMA on the 15 minute chart, price is bucking the trend.
So price is temporarily going against the overall trend and is in a retracement mode.
You now need to look for a good entry point to get into the market in line with the basic principle of buying the dips in an up trend while selling the rallies in a down trend.
Using the EUR/USD example, you would look out for a distinctive candle that would indicate possible price exhaustion as it bucks the trend on the 15 minute chart. The probability is it would soon resume moving in the direction of the trend.
This is an easy exercise and it can be done once or twice a day, taking just a few minutes.
Look Out For Price Going Against The Trend
As soon as you see price crossing the 200 EMA on the 15 minute chart whereas it is well beyond the 200 EMA in the opposite direction on the 4 and 1 hour charts, FOCUS! Snatch the opportunity to get into the market and make a profit.
See for yourself how effective this simple Forex strategy is. Practice it for a short time and then, once convinced, add it to your Forex trading tool kit. - 23167
About the Author:
Get a useful free tip on how to use the MACD indicator for safe trading here: Forex Trading Strategies Learn an important lesson from Mohammed Ali regarding Forex Training: Curency Online Forex Trading
posted by X - Men @ 2:46 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home