All the forex systems which have been created over time do share a number of simple and basic traits. It is true that all different systems will have variations in their studies or indicators they possess, the common and basic rules of trading do not change. A well informed and experienced trader might have the potential to make profit boosting trades by doing nothing more than just following along with forex news about the market. Yet, the bulk of investors will need a clear understanding of the market and then apply the basic rules of smart trading. You definitely must take a short look at the rules offered forth and adhere to them as you gradually learn your own special trading style and you won’t lose sight of the notion the main systems are almost always simple in concept and are relatively easy to build on top of.
The very first thing you need to remain mindful of and invest a lot of time learning would be the ability to read a chart and determine the short-term and long-term trends occurring. By looking at the charts, you will discover the ability to ascertain repeated trends or those trends which may be considered seasonal and use such info to determine past success.
Secondly, a set of tools is an important part of your trading arsenal. Whether you subscribe to a particular Forex system or follow the Forex reviews of a guru, you must remember that these are both tools and tools cannot make the trade, they are there to make the trading easier. Thirdly, do not overuse the leverage that is afforded you in this area of investing. New investors get themselves into trouble very quickly by taking advantage of this leverage.
There is a fourth item to need to be mindful of and this would be the notion you must institute an easy to follow and understand strategy. A common way to do this entails using the common stop-loss tools your broker has made presented to you. Another area of critical concern will be the planning of the entry and exit points on the trade. Lastly, you will also have to add a bit of consistency to the equation along with confidence and patience since these traits will be needed for the long term in order to boost the odds your currency trading is time consuming.
Now that the rules are out-of-the-way, here is a very simple yet successful Forex system, that when employed correctly is 70 – 80% effective. There are 4 indicators that you will follow moving average, MACD, force index and Parabolic SAR. Trades are initiated only when these four signals are in agreement. These trades can be done on any time frame you choose but work most often on the 1 hour and 4 hour chart. Shorter time frames cause a lot of seesaw action and longer time frames require deeper pockets to absorb the small corrections.
If these following four things end up happening then you will need to go long or you will need to purchase the currency pair you have been monitoring
1.The moving average has dropped below the price and now moving up 2.It becomes obvious an MACD crossover beneath the zero line has occurred 3.The force index is moving in an upward direction 4.The parabolic SAR had dropped beneath the price
All of these indicators of these four items need to be in place or you should avoid trading. With a quality Forex system in place, you may also be able to profit from a marker that is trending down as long as you clearly follow these four rules
1.The moving average has gone beyond the price and is now heading downwards 2.The MACD will crossover beyond the zero line 3.A downward direction is where the force index is heading. 4.The parabolic SAR is now above the price.
You must always adhere to such rules and always be mindful that all four indicators are in clear agreement before you take the steps to open the trade.
Even though this particular Forex system is highly effective there will be losing trades at one point or another. No system can ever provide an alternative to educating yourself in how the market works. All you need to do is stay on top of trends and pay careful attention to Forex news reports. You can look for outside signals that will boost your confidence levels in your trades. Stay along with these rules and trade confidently as this will hopefully lead you do the proper profits.