More and more people are getting involved in online currency trading. Unfortunately majority of them will lose their money the first year of their trading carrier. Since you are reading this article I assume you are involved in Forex trading and looking for a strategy that will bring you consistent profit.
In the beginning of my trading career nothing seemed to work for me. I tried every type of trading systems. I tried scalping strategies, day trading on 15 minute charts, hedging strategies, trading economic news. You name it. The good thing of this experience was that I found the longer time period of a trade the more successful trading experience I had. There are a few reasons for that. First I use daily charts to identify a swing trading opportunity. On a daily chart the level of noise is much less than on any other lower timeframe charts. The second reason is that once I set up the trade I leave it alone to mature. This way no emotions involved in a single trade. With the shorter term trades when a trader watches the price action he is in agony if the price goes against his position and he is in ecstasy if the price goes in his favor. This kind of emotional roller coaster will drain his energy very quickly and this trader will start making all kind of mistakes.
Before I go into the details of the strategy I would like to emphasize that swing trading in my opinion is the best way to trade for a beginner trader or someone who struggles to become consistently profitable. It requires far less time to manage your trades than if you were scalping Forex or taking intraday trades based on 15-minute charts. Another good thing is you eliminate the feelings of greed and fear from you trading completely since you are not watching the price while your trade matures.
My swing trading system is quite simple. In my experience the simpler the system the more successful it is in the long run. This is because I have a less chance to make a mistake while making a trading decision. I use Metatrader platform. It is convenient if you want to upload or program your own custom indicators. For my trading system I use Heikin-Ashi candles and support and resistance levels. You need to practice to identify support and resistance levels. It's a very powerful concept in trading. I believe that once you learn to easily identify support and resistance you are well on you way to make a living trading currencies.
The following are the rules of a swing system that I use:
1. Attach Heikin-Ashi candles to a daily chart.
2. Identify support and resistance levels.
3. Once Heikin-Ashi changes its color and price bounces off the support (or resistance) level at the same time enter the market. If the price bounced from support you go long. If price bounced off the resistance level you go short.
4. Place the stop-loss order 5-10 pips behind the support/resistance level.
5. Set the take profit order at the next support/resistance level.
These are the simple rules of a swing trading strategy that I use. Remember to exercise a wise money management system. It's very important if not the most important thing for becoming a successful trader.
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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