The “So Easy It’s Ridiculous” Trading System
Person - Swing Trading John L. Improve your knowledge, skills and trading strategies by reading our Forex Trading forex-ebook. The problem comes with the question:
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A well designed system starts with trend analysis to stay away from potentially losing trades. There are two problems of how a Forex system recognizes the trend. The system responds only to immediate price action. An explosive price movement that is usually the result of news release is tempting people to jump in and make a profit. It looks like a "strong trend", but what usually happens next is a hard fall. Actually, there is nothing bad about using indicators. One Simply Moving Average can do the job.
The problem comes with the question: The correct question is: Trends exist and they can be traded up and down for a profit. You have to focus only on the most reliable market trends.
Do you think that to dramatically improve your success rate you have to read tons of thick books, buy expensive software and spend countless hours of learning more about Forex? Just pick the best trending pair at the current time and simply follow the trend!
You need to know "how well" the market is trending to avoid very short-term trends. STOP hunting the market for every potential trade. Pick only the best trending pairs and time frames and DO NOT take any trading signals in the choppy market unless you know exactly what you are doing.
Successful traders keep it simple and this is the way how the pros made fortunes in the markets - by trading less and making more. To increase the profitability of any system or robot you are currently using, check out this easy and powerful ultimate solution: Forex Books of Financial technical analysis.
Martinez - 10 Essentials Jared F. At this point, we would begin the testing phase by starting with manual back tests. If we went back in time and looked at this chart, we would see that according to our system rules, this would be a good time to go long. You can see that when the moving averages cross in the opposite direction, it was a good time for us to exit. Of course, not all your trades will look this sexy. Some will look like ugly heifers, but you should always remember to stay disciplined and stick to your trading system rules.
We can see that our criteria is met, as there was a moving average crossover, the Stochastic was showing downward momentum and not yet in oversold territory, and RSI was less than Now we would record our entry price, our stop loss and exit strategy, and then move the chart forward one candle at a time to see what happens.
As it turns out, the trend was pretty strong and pair dropped almost pips before another crossover was made! Well, the truth is that it is simple. In fact, keeping it simple will give you less of a headache. The most important thing is discipline.