If you are looking at forex trading strategies and want to win with a simple one which works and will always work and takes less than 30 minutes a day then, one enclosed is for you. The strategy we are going to look at here is a long term breakout strategy.
The reason it works and will continue to make profits, is outlined below, as well as tips on what you need to incorporate in your Forex trading system to win.
Focus on the Big Trends
Firstly, look at any Forex chart and you will see big trends, that last for months or even years. If you can lock into these trends you can make huge amounts of money with leverage on your side. Forget about trading short term and focus on the long term, the odds are better and there is more money to be made.
Catching the Moves
If you look at any Forex chart, you will see that most big trends start from breakouts to new chart highs or lows and you should trade these breakouts.
Most traders can't because they want to wait for the market to come back to get in at a more advantageous price but they wait in vain, as the trend continues.
If they would have bought the break, the odds of it continuing are high and they would have made money but they missed the move. This is why it makes so much money because most traders simply cannot do it. If you learnt to go with these breaks you can make a lot of money.
You only want to trade breakouts, where support and resistance is considered important by traders, so lots of tests and the level should have held at least twice before.
Indicators to Use
When trading breakouts, all you need are bar charts and some indicators which will tell you if momentum is accelerating into the break. If it is, chances are the break will continue. We have discussed various indicators in other articles - but two great ones are the stochastic and RSI, you can learn all about them in an hour or so and if you use them to confirm your moves, you will get the odds in your favour and win more trades.
Money Management
This is easy when trading breakouts - put your stop under the breakout point and wait for the move to gather momentum and then trail it - but don't trail to close! Most traders move their stops to close and get taken out of the trade by short term volatility.
When trading big breakouts, you need to trail your stop slowly and outside of the pullbacks. Remember, to catch the big long term moves and stay with them you must accept short term swings against you.
That's it
You can put together a simple, forex trading strategy, based on breakouts, in a week or less and trade it in about 30 minutes day.
Of all the Forex trading strategies you can use, as a novice forex trader this is one of the best as its so simple, so effective and so time efficient.
It works and will continue to work, as long as markets trend long term which doesn't look like changing - So trade the big breakouts and make big Forex profits!
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