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Simple and effective forex trading strategy
Written by: PaxForex analytics dept - Monday, 24 October 2016 0 comments
You probably noticed that ordinary Forex market traders are constantly trying to find a new indicator or trading plan that will allow them to get more money. The reason for such a frantic search is that most traders lose money instead of earning it.
Moreover, the problem with searching is that it never ceases. A novice trader does not understand that it is enough to find a reliable trading system and stick to it. No single set of indicators has brought big profits to its owner. Only those who know how to interpret a set of indicators can consistently earn on forex.
Consider a very simple trading plan that does not use anything other than the moving averages. Keep in mind that you can change this plan and still make money. For example, you could add a Fibonacci support and resistance levels or RSI. Any of the additional
indicators will work, but as soon as you decide to use this trading plan, stick to its framework.
To use this system, just add 5 moving averages on the chart. This should be the most popular MA - 200, 100, 50, 20 and 10. Using them, you will follow the general movement in the forex market, which is backed by the majority of market participants.
It does not matter what timeframe to use, although the simple moving averages are utilized mainly on the daily charts as they give a lot of confidence in trading decisions.
Ideally, you should wait until all moving averages begin to move in the same direction. This will mean that the market follows the same trend in the long, medium and short-term. It is a very good sign that the forces driving the market are very powerful and prices will continue to move the trend in the same direction.