If you have been reading up forex books or courses, you will have heard of the phrase “The Trend Is Your Friend”. Indeed I will strong recommend new traders to trade with the trend instead of against it.
Trading against the trend is only advisable for those experienced traders who have a feel of the market. Therefore in this post, I will be sharing with you my forex trend trading system so that you can try it on your demo to see if it works for you.
What You Need To Trade The Forex Trend Trading System:
- XM Broker
- Forex Fibonacci Indicator
- Forex Stochastic Indicator
- 200 Exponential Moving Average
How To Trade The Forex Trend Trading System:
First of all, you need to plot the 200 EMA as this is an indicator that you can use to tell the current trend and strength of the market. If the 200 EMA is sloping upward with steep angle, you are seeing a strong up trend. If it is sloping downward with steep angle, you are seeing a strong down trend.
I will strongly advice against you trading when the 200 EMA are pretty flat as there is no trend in action.
Next you should setup the forex stochastic indicator with the setting of 5,3,3. What you do with this indicator is to wait for it to get overbought or oversold.
What we are actually doing when performing this forex trend trading system is to BUY THE DIPS and SELL THE RALLY. When you are in a strong uptrend, you will wait for the price to retrace (DIPS) and then BUY in. When you are in a strong downtrend, you will wait for the price to retrace (RALLY) and then SELL.
In order to do this perfectly, we need the help of the forex stochastic indicator. When you are in an uptrend, you will wait for the price to retrace until the stochastic show sign of oversold. At this time, you will make use of the forex Fibonacci indicator to check if there is a strong level of support or resistance like the 0.382, 0.500 or 0.618 levels.
If the price hits a major Fibonacci level and the stochastic is showing sign of overbought or oversold. It is a good trading opportunity.
For more strategies see the attachment file
XM Strategies.zip (262 Bytes)