The Forex trading world is tough and most newbie traders bail out in the first year. What is even scarier is the fact that most currency traders lose all their trading capital in the first year. Are you scared yet? Actually, that is not my intention. I am simply pointing out a few facts. The upside is that no one can make money faster on any other market in the world. The Forex trading market is the most liquid, available market for trading. Nothing compares to it. The truth is that you can start with a few hundred dollars and in less than a year become a millionaire - this is because of the super leverage available to Forex traders. My intention is to give you a simple formula for trading Forex and winning day in and day out. Here it is:
The Smooth Moving Average (SMA). It is also referred to as the Crossover Method. The SMA is a very popular and often used Forex trading indicator. It is important that you use another color than the ones used for the prices on the chart.
Number 1: Chart an EMA5 in green (you can use any color of your choice).
Step 2: Chart an EMA20 in blue (you can use any color other than number one's color).
You should have 2 SMAs charted. You also now have 2 trading signals.
The Signal to Buy: After SMA5 goes over the SMA20 in an upward direction.
The Signal to Sell: After SMA5 goes over the SMA20 in a downward direction.
The really nice part of this strategy lies in the fact that the currency pair price will not go up unless the buy signal is triggered.
If you really want to improve your trading, I have included a link to a review site that looks at the three best trading software packages on the market.
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