The Easy Forex Strategy For Beginners That Really Works
Are you learning the Forex and looking for a Forex strategy that is simple yet effective?
Many newer traders face the challenge of trying to identify the trend on the intra-day level in order to make their Forex strategy work.
This problem can be alleviated by using the 200 EMA - (Exponential Moving Average).
In surveys it was found that Forex traders all around the world vote the 200 EMA as one of their top indicators. So that is reason enough to use it considering the psychological effect it can have once price starts getting within spitting distance of the 200 EMA.
Using The 200 EMA Strategy
To use this very powerful Forex strategy, create charts on 3 time frames:
4 hour
1 hour
15 minute
Now add the 200 EMA indicator to each chart for the 3 time frames. You could color it red or whatever you prefer to make it stand out.
Some like to tile the 3 chart windows in a vertical style so it is easy to compare them side by side. It can distort the chart a little but for this strategy you don't really need to see the chart in full screen mode.
Now run your eyes over each of the currency pairs you have selected for this strategy.
If you prefer to trade only pairs with a smaller pip spread, they amount to about 9.
Here's a list:
EUR/USD | GBP/USD | USD/CHF | USD/JPY | EUR/JPY | USD/CAD | AUD/USD | NZD/USD | EUR/CHF
Search through and see if price is going against the 200 EMA on the 15 minute chart on any of the currency pairs.
Take as an example the EUR/USD pair. Make a note of where price is in relation to the 200 EMA on the three different times frames.
If price is well above the 200 EMA on the 4 hour chart, well above the 200 EMA on the 1 hour chart, but BELOW the 200 EMA on the 15 minute chart, price is bucking the trend.
So the main trend is going up while price is now in retracement, temporarily going against the overall trend.
Look for a good point to get into the market in harmony with the basic trading maxim of selling rallies in a down trend or conversely, buying dips in an up trend.
Say you were trading the EUR/USD pair, you would look at candle formations to see if there is a doji, or hammer, or any pattern that indicates price is exhausted and that it is about to resume the direction of the overall trend as shown on the 4 hour and 1 hour charts.
Taking only a few minutes, do this little exercise a couple of times and day and see if you can pick up some good setups.
Watch For Price Bucking The Trend
As soon as you see price crossing the 200 EMA on the 15 minute chart whereas it is well beyond the 200 EMA in the opposite direction on the 4 and 1 hour charts, FOCUS! Snatch the opportunity to get into the market and make a profit.
See for yourself how effective this simple Forex strategy is. Practice it for a short time and then, once convinced, add it to your Forex trading tool kit. - 23204
Many newer traders face the challenge of trying to identify the trend on the intra-day level in order to make their Forex strategy work.
This problem can be alleviated by using the 200 EMA - (Exponential Moving Average).
In surveys it was found that Forex traders all around the world vote the 200 EMA as one of their top indicators. So that is reason enough to use it considering the psychological effect it can have once price starts getting within spitting distance of the 200 EMA.
Using The 200 EMA Strategy
To use this very powerful Forex strategy, create charts on 3 time frames:
4 hour
1 hour
15 minute
Now add the 200 EMA indicator to each chart for the 3 time frames. You could color it red or whatever you prefer to make it stand out.
Some like to tile the 3 chart windows in a vertical style so it is easy to compare them side by side. It can distort the chart a little but for this strategy you don't really need to see the chart in full screen mode.
Now run your eyes over each of the currency pairs you have selected for this strategy.
If you prefer to trade only pairs with a smaller pip spread, they amount to about 9.
Here's a list:
EUR/USD | GBP/USD | USD/CHF | USD/JPY | EUR/JPY | USD/CAD | AUD/USD | NZD/USD | EUR/CHF
Search through and see if price is going against the 200 EMA on the 15 minute chart on any of the currency pairs.
Take as an example the EUR/USD pair. Make a note of where price is in relation to the 200 EMA on the three different times frames.
If price is well above the 200 EMA on the 4 hour chart, well above the 200 EMA on the 1 hour chart, but BELOW the 200 EMA on the 15 minute chart, price is bucking the trend.
So the main trend is going up while price is now in retracement, temporarily going against the overall trend.
Look for a good point to get into the market in harmony with the basic trading maxim of selling rallies in a down trend or conversely, buying dips in an up trend.
Say you were trading the EUR/USD pair, you would look at candle formations to see if there is a doji, or hammer, or any pattern that indicates price is exhausted and that it is about to resume the direction of the overall trend as shown on the 4 hour and 1 hour charts.
Taking only a few minutes, do this little exercise a couple of times and day and see if you can pick up some good setups.
Watch For Price Bucking The Trend
As soon as you see price crossing the 200 EMA on the 15 minute chart whereas it is well beyond the 200 EMA in the opposite direction on the 4 and 1 hour charts, FOCUS! Snatch the opportunity to get into the market and make a profit.
See for yourself how effective this simple Forex strategy is. Practice it for a short time and then, once convinced, add it to your Forex trading tool kit. - 23204
About the Author:
Get a useful free tip on how to use the MACD indicator for safe trading here: Forex Trading Strategies Learn an important lesson from Mohammed Ali regarding Forex Training: Curency Online Forex Trading
posted by X - Men @ 12:58 AM
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