Forex2u Forex strategy on successful Forex trading The essence of the FX2u Forex strategy is that it does not have any Forex trading system but could forecast the market trend accurately. Every set of Forex trading system available has its disadvantages. The market trend could not be forecasted. If the market could be forecasted, by depending on the RSI, PAR, MOM analysis techniques and some other theories, Forex traders could easily make a fortune. Many Forex traders could not obtain the anticipated outcome by using these analysis tools, and suffer huge losses. The main reason is relying on some imperfect tools to forecast the unpredictable market trend is just a waste of effort. Therefore the FX2u Forex strategy spirit is to abolish the entire subjective analysis tool. To survive in the market is to follow the market trend, following the market trend is the essence of the FX2u Forex strategy. By using the opposite theory to enter the market, will only lead to lost. The reason is that if the market rises, it may continue to rise. If the market drops, it may continue to drop. No one is able to forecast when the market trend will stop. By following the market trend, the market risk could be reduce to the lowest, the FX2u Forex strategy will advance the following the ten principles: fully understand the how market function and the market trend, else don’t trade After entering the market, the Forex trader MUST immediately put a market stop. If the stop order has been hit it MUST be executed immediately, NEVER make changes by lowering the stop order price. If the forecast is wrong, Forex traders should leave the market immediately, then analyze again. If the forecast is wrong, Forex traders should stop loss and should not increase trading. Forex traders should admit mistakes, do not continuously make mistakes. All analysis tools are imperfect, mistakes could always occur. If the market rises Forex traders should buy, if the market drops Forex traders should sell, always follow the market trend. Forex traders should not forecast the market price because such forecast will not be as easy as forecasting the market trend. If the forecast is wrong, once the loss reach 10%, Forex traders must stop loss immediately, do not let it surpasses 10%Article Submission, otherwise it would be difficult to recoup the capital again.
Developing a powerful forex trading strategy is the one secret that never ceases to deliver successful results to professional forex traders. If you are new to the forex trading world, the one thing you should primarily focus your energies at first is having a good strategy to implement.
The world of forex can be a tough one unless you have a good trading strategy. If you do not have the right tools and strategies to equip you, you may end up having a sore footing in the game. The world of currency trading is very unpredictable. You cannot let yourself become complacent with your current standing. At anytime, you may expect currency rates to almost crash while there are times when it seems that they are just going to keep reaching for their zenith. During these times, it helps to know that you have an effective strategy to rely on.
Developing a steady forex trading strategy takes time. It gets constantly changed as you stay in the business longer and mature in your craft. It takes more than just a few months to get the right strategy to work for you. Some people think that once they have one, they can already expect the income streaming in but that is not the real case. Also, the right attitude is necessary when creating the best trading strategy. Some good traits you must develop are as follow:
1. Be patient – Do not let the stresses and the pressures get to you too much. Instead of becoming all cross at how things do not seem to be coming your way, try to evaluate where your current strategy may have gone wrong. You should allow yourself room to make mistakes because doing so helps you realize the things you still needed to improve on. Keep an open mind and welcome changes. Also, do not be too hard on yourself especially if you are a forex beginner.
2. Observe trading behavior – You will add more value to your trading strategy when you look at other people’s actions. Throughout the whole business, you will possibly come across those who have established their names in the forex business. When you get to have the chance to do business with them, take further advantage by observing how they place their orders and how they make a sell. This gives you great insights on how you can also move around in your own transactions.
3. Keep your eyes open – This is metaphorically and literally speaking. Always make yourself available to accommodate possible risks and opportunities. Your forex trading strategy will become stronger if you have hardened yourself through experience. Take calculated risks and develop your foresight as you get into a new game plan.
4. Get further input – Your strategy will become empowered through continuous knowledge. As you already immerse yourself within the forex market, you will gain access among new forex information and even avail free tutorials. Take advantage of these offers so you can update yourself with what professionals are now using to stay on top of the forex business. Replenish your trading strategy by browsing through forex websites, article directories, and even visiting forex forums which freely discuss topics related to your target market. Keep in mind that your forex trading strategy draws its strength from new information.
Successful forex trading requires building a good strategy. Several technical indicators exist for forming the strategy. Here are given a simple, reliable and free forex trading strategy.
The two indicators that are used in the strategy are pivot point analysis and stochastic indicator. The confirmation indicator is the relative strength index (RSI). Let us see first an overview of these indicators and see then how are they applied together in the trading strategy to make decision on whether to buy or sell.Trading Forex requires learning technical analysis for currency pair price. Many technical indicators exist that can be used for technical analysis. In the forex trading strategy presented here we use two main indicators and one more indicator that is used as confirmation for the price trend.
The pivot point analysis involves determining support and resistance level. The support level is defined as a level the currency pair cannot go below it for a large time period. Similarly, the resistance level is defined as a level the currency pair cannot go above it for a large time period. The pivot point analysis defines many levels at different strengths. The higher support or resistance levels the strongest level which means it is more likely that the currency price reverse direction at this level. This is the first indicator in our forex trading strategy.
The stochastic is an indicator that determines the degree of increase or decrease for a given period. The higher the value, the more the currency price increases over the period. The lower the value, the less the price is going. If the price is continuously rising over the specified period, the stochastic will be high for a large period and this is called overbought. Te reverse is true and will result in oversold condition. If this indicator is more than 80 % for large period, we say this is overbought condition. Also if it is less than 20% t is oversold condition. This is the second indicator that will be used in our forex trading strategy.
The RSI is like the stochastic but uses different calculations. It can be used to determine the overbought and oversold conditions. It is also used to determine the price trend. If it is more than 50 % the price is going high and the reverse is true. This is a confirmation indicator in our forex trading strategy.
The forex trading strategy given uses the pivot point analysis and the stochastic as the main indicators. The trader must first check the stochastic indicator. If it is high for long time (especially more than 80%) then it is overbought condition. Similarly, if the stochastic is low for long time(less than 20 %), then it is oversold condition. The trader must expect a reverse in the price when those two conditions are seen.
Once overbought or oversold conditions are seen on the price curve, the trader can see the pivot level at which the price reaches. The more the level the price reaches, the more likely that the price will reverse. For example, if the price is overbought and we see that the price reaches the R3 level or a higher resistance level, then a very strong probability that the price at certain point will reverse. The price also at this condition will change very strong which will make many pips.
The entry point of the trade at this forex strategy can be determined by the RSI. When the price is overbought or oversold and reached the highest pivot level (or break out that level) the RSI can be monitored to determine when to enter a trade. If it is higher than 50 %, the price is going high. If it less than 50 %, the price is going low.
The only way to consistent profits within the forex market, is to have a well planned forex strategy that considers all the pros and cons of each approach while considering your particular needs and expectations.
In reality, there can be profits in any forex strategy as long as you are well aware of the market movers and signals at any given time, and you have a clear understanding of all the elements that support your forex strategy.Some might argue that the best forex strategy would be the monthly, the weekly or the daily trade. Others might say the best forex strategy is the intraday trading, and the truth lies somewhere between the middle.
Some traders base their forex strategy in long term investments (monthly or weekly positions), while others will build their forex strategy around daily or intradaily positions that might be open no longer than a few hours or even minutes (this traders are known as scalpers).
A long term forex strategy will probably earn you 100 or 200 pips in one trade, but that is probably all you will gain within a month or a week if your forex strategy gravitates around monthly or weekly positions, But on the other hand, a well carried scalping forex strategy can deliver many little 10 or 20 pip trades during a day, meaning that maybe you can total anything between 80 to 160 pips in one day using this forex strategy.
The intraday forex strategy benefits from the fact that the forex market, whether moving up or down within any particular currency pair, will always make small fluctuations that you can profit from using an intraday forex strategy.
Which forex strategy is best for you will depend greatly on your personal investment and risk management style, and also on how much time you can dedicate during the day in order to follow the market trends and spot the right entry points for a profitable trade.
I have become a fan of the intraday forex strategy among other things because of its profitability and the fact that I have some time to spare, but mostly because I get help from a software I acquired a few months ago, which places and closes trading orders by itself based on the market trends that often may occur during the night.
So even when if am not in front of my pc, I can go on trading all day and all night, profiting from of every little window of opportunity to scalp a few pips out of the market. With this approach, my intraday forex strategy delivers about 120 pips daily, which in my particular case means I earn about $3,000 per month with a 5,000 investment.
So the intraday forex strategy can indeed be the most profitable one, but it will demand that you stay very attentive at what is going on within the market on a minute by minute basis, unless of course you have a software that stays on guard while you are busy with your job or anything else that might keep you from continuously analyzing the market trends.
If you are trying to develop a successful forex strategy for the first time, you are probably struggling a little bit in trying to figure out what works and what does not. There is so much bad information out there that the forex market itself is getting a bad name. The market isn’t bad, it’s just the bogus strategies that are making the market look more difficult than it is.
A good forex trading strategy will not actually be a forex system, but an analysis that breaks down several different areas of the market itself that will consistently produce a profit. Trying to predict the market is just plain foolish, what you need to do is develop a way to spot trends and quickly and accurately as possible so that you can take full advantage of them when they occur. This market is built on taking advantage of profitable trends.
If you follow trends versus trying to predict the market, you will find that you are able to keep your risk of loss lower. In order to do this, you must follow a few basic rules, in essence, this becomes your strategy. The most important that you need to become familiar with when trying to spot trends is that you must understand how the market actually works. Education or good forex training is the one key that cannot be avoided or overlooked.
Once you are in the market, you have to establish a market stop. This is your safeguard against getting yourself buried. You should never change this, it is there to protect you. Do not try and go against a loss, it is going to happen and you are just going to have to get out on your stop and reanalyze your data. There is no shame in admitting that you made a mistake as long as you learn from it. Trust me, it happens to everyone sooner or later.
Another thing that you will want to keep in mind is that as no human is perfect, no forex trading system is either. The key is in having a system that will regularly and consistently produce a profit. Taking a loss every now and then is expected, you just have to be able to control them. Follow the simple philosophy that you buy when the market is going up and sell as it begins to go down (this is a trend in case you weren’t paying attention earlier) and you will do fine.
I have to emphasize this again – avoid the pratfall of trying to predict where the market will go. Try to do this and you may get lucky, but that luck could lead to overconfidence and horrible losses down the road. Taking any loss of more than 10% is almost impossible to recoup from and trying to predict a market could result in exactly that.
Being a Forex trader you’re going to need to develop many different skills together with developing reactions to various trading scenarios. Sometimes it is easier said than done. After helping hundreds of traders, I have noticed that most of them don’t succeed at Forex strategy trading for the exact same reason, they over-trade. So how do you know when you’re over-trading? Here’s a quick guide that can assist you recognize when you’re over-trading and the ways to stop it. How many strategies are you currently using? I’ve met individuals that were trading between 5-10 different strategies and of course there were not making any money, but why is that? Well, apparently the more strategies you use, the less you concentrate on the market itself. Getting to know the market and your strategy is important to becoming profitable and consistent, but this really is not possible if you have 3, 5, or 10 different strategies to pay attention to. How much are you presently risking on every trade? Understanding how much you’re risking is incredibly more important than understanding how much you’re going to make. That’s why money management is really important. I have come across traders move from the losing side to the profitable side just because they implemented money-management into their trading. How do you feel when you’re being profitable? The typical response to this question is great, and many people don’t realize they’ve become greedy until it’s too late. As humans we are inclined to get greedy when situations are running nicely for us. I’ve been through it, done that, and the result was not good. When you get greedy you are more likely to act reckless and commit mistakes. After asking yourself these questions you should have a much better idea of where you are. Over-trading is often as harmful as using a strategy that has a low ROI (return on investment). Now let’s talk about how you can prevent yourself from over-trading. Employ a trading plan: you should always know where you are going to exit a trade BEFORE you even enter it. Also, make sure you have a set of rules in place for other trading variables for example take profit levels, stop losses, and progressive TPs. Discover more about your trading style: this is very important because the type of MM (money management) you employ for one trading style is different than the one you use for another one. If you’re a scalper you will probably use small percentages in each trade (0.5% to 2%) since you are taking a great number of trades. A swing trader might use a larger percentage like 3% or 4%, it all really is determined by your trading style and Forex strategy you use for Trading. Due to this fact, learning more about your trading style will assist you to be effective as a trader and take better decisions.
Trading the FX market can be a very challenging career for individuals that don’t have the right tools, guidance, and sufficient understanding of the markets. My goal is that by reading my Forex strategy trading tips it will be easier to improve your knowledge of the markets and your net profit. I’ve dedicated this informative article to speak to you about some of the main benefits of having a Forex mentor. When I first started to trade I had one and you should have one too. Having a mentor will take your trading to another level. Having a mentor is among the best things any Trader can make to enhance his/her revenue from the markets. When you have the opportunity to look over the shoulder of a professional Trader that has been trading for several years and is already profitable, you can substantially decrease the learning curve and reach your trading goals easily. You’re just about to learn 4 of the most significant great things about having a Forex mentor. A Forex mentor will help you to put it all together: One of the biggest challenges Forex traders face is that they need to think about money management, their trading strategy, funding their trading account and many other elements in order to become successful. Due to this fact, many Forex traders go ahead and take fast lane to Forex success by getting a Forex mentor. A Forex mentor can help you to build a plan to achieve your goals, track your progress, and make any adjustments needed as you go along. A Forex mentor will help you to discover new possibilities: To find the best opportunities you need to do business with the very best traders. A mentor is likely to be an expert trader that has been trading for a long time and knows how to take full advantage of the Forex market. They normally also know which brokers are the best, which trading strategies do actually work, and how to become more effective as trader. A Forex mentor can shorten your learning curve and fix what is broken: Having someone to help you to define your trading goals, create a realistic plan to achieve them, and that will correct you every time you commit a mistake can be priceless. Learning the way to successfully trade the foreign exchange market takes time, dedication, effort, as well as lots of premium quality education. An FX mentor can help you to reduce the amount of time you have to learn how to trade currencies properly and help you to realize why you are not succeeding or achieving the results you want. A Forex mentor can mean the main difference between trading success and failure: The majority of people will not have enough time to study new Forex techniques or develop their very own trading strategies. As a result, they try to get (and several times buy) a trading system from a so called “Forex guru” to make their dreams come true. After weeks (or even days) of trading this “holy grail” trading system they realize that the system is not delivering the outcome that the seller promised. Sounds familiar? This same thing happens to literally thousands of people worldwide. However; not very many people choose to take their destiny on their own hands and seek professional help and get a Currency trading mentor. Remember, to trade like the best, you need to trade with the best. I hope you enjoyed my Forex strategy trading tips. I will be providing you with more useful trading secrets within the next few days.
Over the last several years, thousands of people have attempted to make money in the currency trading markets, also known as the foreign exchange market, and, more commonly, “Forex.” The Forex market offers a tremendous opportunity for trading profits, and allows anyone to trade from home over the internet. The Forex market is global, so it’s open 24 hours a day, 5 days a week, making it convenient for busy people to trade when their schedule allows.
However, just like any other investment market, trading Forex is not easy. Just like stocks, gold, or other investments, the value of Forex trades can go up and down in a given day. And, just like those other markets, it’s easy to lose money if you don’t have an effective Forex trading strategy.
Newcomers to the Forex market are often overwhelmed by the sheer number of different Forex strategies available. Some traders use “technical analysis,” others use “fundamental analysis,” and still others use a combination. Even the basic strategies have a steep learning curve, and since the leverage of the Forex market allows currency traders to control very large amounts of money, even a small mistake can wipe out a rookie trader’s investment.
Now, however, there’s a new way to trade in the Forex markets. This new currency trading strategy requires no charts, no studying, and very little effort. Instead of spending months or years mastering even the basic Forex strategies, now a trader can simply copy the trades of the world’s most successful traders. It’s like looking over the shoulder of the smartest kid in class. This new concept is called “social Forex trading” and it’s a rapidly-growing trend in the Forex market.
The way it works is simple: you log in to a broker who offers social trading, and then search for traders with a track record of success. This search can be sorted by risk level, number of profitable Forex trades, and so on. Most brokers also offer charts which reveal each trader’s Forex success on a weekly, monthly, and yearly basis. So it’s very easy to find traders who know how to trade currencies, and make profitable trades. Then, you simply click “copy,” and every time that trader makes a trade, you’ll make the same trade in your account. Of course, since your account size is probably much smaller than the Forex expert you’re copying, the trades are proportional. For example, if the expert you’re copying has a $10000 Forex account, and you only have a $1000 account, your trade will be 1/10th the size of the expert’s Forex pick. But, you’ll still get the same profits, percentage-wise. For example, if the expert makes a 10% gain on his $10000, you’ll gain 10% on your $1000. So the expert’s Forex strategy earns him $1000, and earns you $100.
Right now, only a few brokers offer this social forex trading option. The most well-known is eToro, which calls their program “Open Book” and “Copy Trader” depending on the country. Other brokers also offer the program, but tend not to have as many active expert Forex traders as eToro.
So, if you’re a beginning Forex trader and you don’t know where to begin, or you’ve lost money on currency trading before, consider social Forex trading. You may find that the best Forex strategy is simply copying the experts.
I remember a few years ago, when I started trading too how frustrated I was in my quest to finding the best possible strategy. In order for you not to go through the same ordeal I have summed up a few points I discovered along the way.
There are so many different kinds of Forex strategies, there’s really no good reason that you must choose a strategy which doesn’t suit you. However several traders nonetheless do select strategies that are totally unsuitable for them. If you are able to go with a Forex strategy that matches your personal needs, you will then be in a position to increase your chances of succeeding as a trader. An inappropriate for you strategy, will most likely result in unnecessary losses.
There’s no right or wrong forex trading strategy; all the same there are some questions that when answered can assist you to better decide which strategy suits best your needs.
Setting Your Goals and Targets
To start with, you should have to have clear goals and objectives. If you’re planning on using Forex as a long term investment plan, this would require a completely different strategy than if you wanted to trade on a daily basis. You can actually generate excellent profits both in the short and the long term, but the risk of big losses is always lurking just around the corner.
Whatever your goal is, make sure you choose an easy to follow and simple to implement strategy. It should be in accordance with the trading currency rates and by observing trends, you should have a good indication with regards to which trading currencies can generate the largest profits.
Short Term Vs Long Term Perspective
When you are trading forex do you usually have a short or a longer term outlook? There are a variety of factors that make up an investor’s decision with regards to taking a short or a long term outlook.
For the younger ones who have quite large forex accounts they may well decide to a shorter term approach like for example day trading strategies. These can however prove to be more risky and difficult than the longer term. For the older in age traders who might want to diversify their investments, will most probably go with a longer term outlook by holding positions from weeks up to years ahead. This kind of trading is much less stressful and could possibly result in overall higher returns. Investors which follow short term strategies often end up spending too much time in analyzing and processing excessive information when trading. This can often result in putting them further behind traders that just let their trades to unfold with no further involvement other than maybe trailing stop losses.
Planning to Trade Part Time or Full Time?
What is your daily program? The majority are looking to get involved in trading forex simply as a means of supplementing their monthly income and not as full-time traders. In case you are trying to fit forex trading within your busy daily working program and other daily obligations, you will need to implement a strategy that enables you to set your trades and withdraw yourself to your other daily activities. A great number of traders find that this type of strategy works best for them as it minimizes emotional trading usually caused by over analyzing the market, often resulting in wrong decision making. In most cases setting your trades and just leaving them to take their way can be the best tactic to generate substantial profits in forex. Likewise, you could go for a long term strategy, if you just want to invest without spending a great deal of time.
Choosing a Strategy That Suits Your Character
Your character is something you definitely need to consider when choosing a forex strategy. What type of person are you? Are you math oriented or perhaps a more creative thinker? Certain character types will tend towards strategies with definitive setups and strict rules, while other types of personalities will gravitate towards forex strategies that need further discretion and interpretation. Also, if you are an impatient type of person that requires immediate gratification, you may most probably want to go for short term strategies.
Simply by implementing a foreign exchange strategy that best suits your needs; you will significantly increase the chances of succeeding in the forex market. A suitable choice will assist you to remain on track and motivated during your Forex journey. The secret is to pick a trading strategy that personally suits you best as an investor. Should you commit yourself as a trader and truly plan to maximize your profits, you should invest time and energy in researching till you find the strategy that’s made for you. Always remember to keep things simple as a beginner, but bear in mind you can change your trading strategy whenever you wish, so don’t feel you’ll need to apply the same one permanently. Foreign exchange strategies are crucial, so be sure that you have made the best possible choice!
Candlesticks are a way to represent price in a security. Comparing with a simple line chart wich only give you the closing price for the session (week, day, hour, minute…), candlestick charts give you much more information; closing, open, high and low price for the session.
Candlesticks are according to many successful traders the best tool for trading stocks and forex and so widely used because they achieve improvements in performance that result in more profits for both swing and day traders.
Candlesticks techniques and strategies will give you:
An edge in the market
Simple and easy to understand charting
Powerful buy signals
Powerful sell signals
The Candlestick Construction
Candlesticks can be used in all time frames and when trading stocks, futures, forex and every other market that have an open, close, high and low. If we look at a daily time frame, one candle (session) represents that day’s trading range.
Above you can see how the candlestick is constructed and looks compared to a bar chart. The painted section is the candle body. The candle body is green if the close is higher than the open. If the close is lower than the open, the candle body is black. The lines above and below the candle body are called shadows. The top of the upper shadow is the session’s high and the bottom of the lower shadow is the session’s low of the day. Sessions where the open and close have the same price are called doji’s, illustrated below.
Click here to learn more about candlesticks…
The doji is a candlestick where neither the buyers nor sellers control the session and, therefore, should alert us that the former trend may lose its momentum, or that the momentum is about to explode, which the candlesticks strategy explains below.
Simple Forex And Stocks Candlesticks Trading Strategy
In an up or downtrend, the Doji is either an indication that the trend is about to end if traded as a reversal or an indication that the trend is only taking a pause.
Candlesticks, where the body is one-fourth of the high-low range of the candle, is a doji in our opinion, some use other names depending on where in the range the doji’s open and closing price occurs, but we recommend you keep it simple as we do.
In this strategy, we trade shorts low and cover lower, or if trading longs, buy high and sell higher. Let us say we have a downtrend (falling price) illustrated in the daily (each candle represent on day price action) EURUSD charts below. The strategy can be traded as both a day trading strategy and as a swing trading strategy.
Since we have a downtrend, we now look at a short trades, so for us to have a setup we want:
A doji with low at lowest price for the recent ten candles.
The doji’s lower shadow is bigger than the upper shadow.
Setups are marked with blue arrows in the chart below, can you see some more short opportunities?
SETUPS TRADING WALK
The strategy is to enter a short position when price breaks the low of the setup doji’s low with one tick.
Stop loss is placed one tick above the setup doji’s high.
Take profits when you have 1:1 risk/reward (i.e. the distance from stop loss to entry and extend this from your entry).
The first short was a fast trade where we entered and exited the trade the same day for a nice profit.
Profit = 68 pips
CANDLESTICKS STRATEGY TRADE
The second short almost stopped us out, but reversed back down and was also a profit realized after 8 days.
Profit = 91 pips
CANDLESTICKS STRATEGY TRADE
I really hope this gave you some ideas on how to trade candlesticks. Feel free to share this and check out more strategies and tips here, for more great strategies and tips on how to become a better trader.