This Simple Forex Strategy Is Amazingly Profitable
Are you learning the Forex and looking for a Forex strategy that is simple yet effective?
Many Forex strategies rely on clearly identifying the intra-day trend, and this presents quite a challenge for the newcomer to the market.
This problem can be alleviated by using the 200 EMA - (Exponential Moving Average).
The 200 EMA is one of the most popular indicators of all time with Forex traders the world over, and for that reason alone is worth noting due to the psychological effect on the market place price can have when hovering around the 200 EMA.
Using The 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 Chart
Now plot a 200 EMA indicator on each chart and, as a suggestion, color it red, for easy visual impact.
One suggestion is to use the vertical tile feature and have the 3 charts vertically side by side so you can easily eyeball the position of price relative to the 200 EMA. The candles may appear a little distorted but that really doesn't affect your strategy.
Now run your eyes over each of the currency pairs you have selected for this strategy.
There are about 9 different currency pairs with a pip spread less than 10, so many prefer just to trade these.
Here they are:
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.
So for example, look at the EUR/USD pair and note the position of price relative to the 200 EMA on the 3 time frames.
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.
Using the fundamental trading principle of "buy the dips in an uptrend", "sell the rallies in a downtrend", look for a suitable entry point.
In the example given above you would look for an opportunity to buy the EUR/USD, perhaps watching for a candle signal that price has exhausted it's downward momentum, bucking the 15 minute chart 200 EMA and will soon resume it's upward momentum.
Taking only a few minutes, do this little exercise a couple of times and day and see if you can pick up some good setups.
Look Out For Price Going Against The Trend
Once you see price bucking the 200 EMA on the 15 minute chart, whereas it is on the opposite side on the 4 hour and 1 hour charts, sit up and take note. Watch carefully and grab the opportunity to get in and make some pips.
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. - 23199
Many Forex strategies rely on clearly identifying the intra-day trend, and this presents quite a challenge for the newcomer to the market.
This problem can be alleviated by using the 200 EMA - (Exponential Moving Average).
The 200 EMA is one of the most popular indicators of all time with Forex traders the world over, and for that reason alone is worth noting due to the psychological effect on the market place price can have when hovering around the 200 EMA.
Using The 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 Chart
Now plot a 200 EMA indicator on each chart and, as a suggestion, color it red, for easy visual impact.
One suggestion is to use the vertical tile feature and have the 3 charts vertically side by side so you can easily eyeball the position of price relative to the 200 EMA. The candles may appear a little distorted but that really doesn't affect your strategy.
Now run your eyes over each of the currency pairs you have selected for this strategy.
There are about 9 different currency pairs with a pip spread less than 10, so many prefer just to trade these.
Here they are:
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.
So for example, look at the EUR/USD pair and note the position of price relative to the 200 EMA on the 3 time frames.
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.
Using the fundamental trading principle of "buy the dips in an uptrend", "sell the rallies in a downtrend", look for a suitable entry point.
In the example given above you would look for an opportunity to buy the EUR/USD, perhaps watching for a candle signal that price has exhausted it's downward momentum, bucking the 15 minute chart 200 EMA and will soon resume it's upward momentum.
Taking only a few minutes, do this little exercise a couple of times and day and see if you can pick up some good setups.
Look Out For Price Going Against The Trend
Once you see price bucking the 200 EMA on the 15 minute chart, whereas it is on the opposite side on the 4 hour and 1 hour charts, sit up and take note. Watch carefully and grab the opportunity to get in and make some pips.
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. - 23199
About the Author:
Get a useful free tip on how to use the MACD indicator for safe trading here: Free Free Forex Strategies Learn an important lesson from Mohammed Ali regarding Forex Training: Forex Online System Trading
posted by X - Men @ 2:46 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home