Many people who get involved in trading, especially online currency trading believe that their success as a trader entirely depends on picking a good trading strategy. While it's not entirely wrong I believe it is not the strategy that makes one a successful trader.
Science you are reading this article I assume you are looking for a strategy to make consistent profit in trading. In my opinion the worst enemies for the profitable trading are our emotions. I think every trader is familiar with the agony of watching how market goes against your position and excitement of watching the market going in favor of you position.
You may have a discipline not to act under influence of your emotions. You do not move your stops do not exit prematurely from the trade. Nevertheless those emotions will drain your energy and you will start making mistakes in you trading decisions. So here is the question how do you eliminate emotions from your trade?
When I first started in Forex I tried every single style of trading. I scalped the Forex off the one-minute and 5-minute charts. Traded intraday systems on 15-minute charts. Tried to trade the economic news. You name it. What I found interesting is that the longer the trade lasts the better success rate I had in the long run. Therefore I think the swing trading strategies that last a few days are the best strategies for a beginner or a trader who struggles to become consistently profitable.
There are two reasons for that. First is when you use the daily chart there are a lot less noise than on the lower time frame charts. The second reason is the most important in my opinion, when you monitor your trade only a fraction of time while it matures, you mostly eliminate your emotions from you trading. This was my experience. I identify the trading opportunity, enter the trade, set the stop-loss and take-profit orders and leave it to unfold. I monitor my trades once a day. Trade is over once it hits the take profit or stop loss. Believe it or not this trading style became the most successful for me in the long run.
So my advice to any one who is starting his career in online currency trading or to anyone who is looking for a way to make consistent profit start with the swing trading strategies. By doing so you will have very nice risk-to-reward and win-to-loss ratios that will help you grow your account consistently
As an example of a swing trading strategy I would like to give you one of my own strategies. I use Metatrader platform. But all you need is to be able to plot Heikin-Ashi candles. So it doesn't matter what platform your broker uses as long as you have those candles on you chart. The beauty of these candles is that they incorporate momentum information into the candle.
These are the rules of my system: First you need to identify support and resistance levels. Attach Heikin-Ashi candle to a daily chart. You will need to practice a little to be able to easily identify support and resistance levels. In my opinion if you master support and resistance you are well on you way to make a living in Forex. Now look at Heiken-Ashi candles, once the last candle changes the color look if the price bounces of the support of resistance level. If it does then enter a trade. Sell if price bounced off resistance, buy if price bounced off the support. Place your stop loss order 5-10 pips behind the support/resistance level depending on currency pair. Usually I place take-profit at the next support/resistance level. You may want to experiment with this take-profit level to see what best works for you.
Albert Schmidt is a part-time currency trader. After quite a long time of struggle he learned to make consistent profit trading in Forex. Review a trading strategy he successfully uses in his trades. |
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