Hello there Fellow Forex Traders,
This is my very first post here and I’m delighted to see a community like this centered on providing advice for helping people to build successful forex careers.
I have been looking at several methods and developing my own over the past few months/year, I feel that we have a habit of over-complicating what needs not be at all complicated.
Why?
I think it may give a sense of control in a game where you don’t know what’s going to happen next. Hence, we come up with all kinds of complicated rules and methodologies that give us a sense of “sophistication” and confidence, when really we’re either riding a trend or trading between a whipsaw.
With that in mind, I wanted to share what I could come up with as the most basic Forex strategy possible.
Step One: Pick a Market. I personally like GBP/JPY and XAU/USD for their volatility.
Step Two: Identify Whether the Market is Trending or Consolidating. Use whatever you want (200 EMAS, MACDS, HHHL, LHLL, etc. but mostly just use your eyes…
Step Three: Wait for a small movement in the opposite direction of the trend.
Step Four: Execute your order on the next confirmation candle of a continuation of the trend. Calculate your position size so that if the price comes below your confirmation candle you lose 1% maximum.
Step Five: Set your take profit at 1 - 2% gain.
I haven’t done a lot of backtesting on this. I only trade with £500 whilst I’m new and I only trade between the London and New York sessions. I take a maximum of 2 trades per day and I journal each and every single entry to see if there was a better opportunity.
I hope this helps someone who is brand new, please let me know if I’m completely off my head and need to go back to the drawing board…