Forex Trading Strategy - A 3 Step Method for Success

Forex Trading Strategy - A 3 Step Method for Success

by kelly Price

Here we will outline a simple way to make money with a forex strategy anyone can learn and apply in a few days and it works. Let's look at this forex trading strategy in more detail.

First things first

The key to currency trading success is a simple robust method combined with discipline.

If you don't understand how and why your method works you will NOT be able to apply it - that's why you have to learn it yourself.

Currency trading success comes from within.

Now how do you trade?

1. Methodology

The first point is you need a simple robust method - simple systems work far better than complicated ones as there are fewer elements to break.

The best system to use is a breakout system, based upon support and resistance and confirmed by momentum.

2. A Forex Trading System

How should your system work?

Firstly, forget all about the idea of buying low or selling high it doesn't work in the real world of forex trading - the best way to trade is to buy breakouts to new highs or lows. Most big trends start from these breakouts and the odds are in your favour.

Trade breaks of valid resistance (the more test the better) and if possible in two different time frames spaced by weeks or months and the more periods the better.

When a break occurs you want to go with it. How do you decide?

You look at forex price momentum.

If you don't know about momentum indicators are, now is the time to start.

Get one or two you like - we favour the RSI and stochastic and you can look them up in our other articles.

If price momentum supports the move you are not guessing or hoping the move will continue - you are trading the confirmation.

Stop is then below the breakout point.

That's nice and simple then and it is - but breakout logic is timeless; most traders want to wait for pullback but on the big moves they don't come and their left missing the move - don't make the same mistake.

If momentum supports the break execute your trading signal on your forex chart and go with it.

Money Management & Discipline

You are only trading valid breaks of support or resistance and these normally lead to big trends so you keep your stop back - Do not trail too soon. When you do, make sure you keep your stop outside of normal daily volatility.

This system is based upon breakout methodology which works and is easy to understand.

You can also see why the bulk of traders don't do it.

You have to buy highs or sell a low which requires discipline - but if you want to make money and you have confidence in your forex trading system, then you will do it.

The fact is if you want to succeed remember this equation:

Robust simple system + Applied with discipline = forex success

You need both to come together in your forex trading strategy, to enjoy currency trading success.

It may be simple but that doesn't mean it doesn't work - it does. Furthermore, it should only take 30 minutes a day or less to apply and execute.

Forex traders constantly want to predict (this means hoping or guessing ) and lose, they also want to buy low or sell high - but this is not possible and also if you do it, your not trading high odds trades. A simple breakout system, you understand and can apply with discipline works best.

Try basing your forex trading strategy around the above and you could win big at forex trading