POSTED by: forex trader on 12/18/2009
There are many forex trading system out there. They should be simple and easy. I always use breakout and retracement for my trading system. I never use it for small time frames like M15 and M30. Hourly (H1), four-hourly (H4), and daily (D1) are my favourite time frames. Because I usually find breakout and retracement there.
Why do I use breakout for my strategy? Just look closely at currency pairs and you will find that trends usually start from breakout. Breakout strategy is so simple, just selling breaks of support or buying breaks of resistance, but most traders don’t do it. They always try to buy low and sell high and when they find a breakout then they just wait for a pullback, but prices never come back again and they finally lost opportunity to make profit. The professional traders do not care about perfect trade, buy low and sell high. They just want to know when prices are trending then they will decide to enter the market.
When you use this strategy, you will find many false-breakouts. How to know valid breakouts? A valid and good breakout usually has been tested by prices at least two times. When prices break the line, you should wait for closing. If prices close above resistance or below support then it may be a valid breakout. You should consider the main trend. If main trend is uptrend, so just entry for buy not sell.
For breakout strategy, I usually use trendlines to make a chart pattern. When prices break it then I follow it.Breakout trading is very low risk because your stop is always small so if your analysis is wrong, you will get out with a small loss and if the trend runs, you will get big profit.
Sometimes when prices are trending, we will find prices are pullback before it move to the direction of main trend. It called it a retracement. I usually use fibonacci retracement for retracement strategy. When prices are pullback at fibonacci levels, so there is a signal to enter the market. You can use 161.8% for the target. I also use candlestick chart pattern to get a confirmation.
Breakout and retracement are good forex trading system. You should learn it as much as you can because it’s so simple and easy. Don’t give up, trading is not difficult but it also is not always easy. As long as you always follow your trading system then you will be a successful trader.
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POSTED by: forex trader on 12/18/2009
Forex trading has a great appeal among the people due to the possibility of making instant wealth. Forex trading strategies reduce the risk disregarding of the person’s involvement in position trading, day trading, or swing trading provided they are disciplined enough to stick to the their forex trading strategy. The forex trading strategies which are devised after observing the market for quite sometime make profits by rising above the odds. The forex traders who are best in their profession do not enter a trade without preparing an exit strategy. They know very well when to minimize their losses and when to maximize their profits. They are very disciplined in doing both.
Stop Loss Order
Stop loss order forex trading strategy is also used usually among forex traders. This strategy protects the traders and creates a situation called the predetermined point, not letting trader to trade when it’s reached. This forex trading strategy minimizes the losses. Sometimes this strategy might backfire and make the trader to run the risk of stopping their trading leading to a higher loss, thus it is up to the trader to use or not to use this forex trading strategy. But it’s recommended to use it.
Automatic Entry Order
An automatic entry order forex trading strategy is also one of the widely used strategies. This strategy lets traders to enter in the trading activity when the price is desirable for them. Here the price is already determined and when prices hit their orders, traders enter into the forex trading automatically.
Leverage
Forex trading strategies help to get success in forex trading. Forex trading differs from trading stocks and the use of forex trading strategies help the person to make more profits in a very short period. There are many forex trading strategies created by traders, the most useful among these strategies is called as the leverage. This forex trading strategy allows the online traders to get more funds than the deposited amount; by adopting this strategy the benefits are maximized. This strategy helps in utilizing the amount deposited in the account even up to 100 times against any forex trading by backing high yield transactions very easily and better results are got. This leverage forex trading strategy is used by the traders on a regular basis to take advantage of fluctuations happening in the forex market in short term. Be careful when use leverage, it can make you get big losses if you don’t use it wisely.
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