In few following paragraphs, profitable forex strategy will be provided. Together with results, full logic, experiences and full step by step instruction on how to profit from it. All free.
This forex strategy has been traded for almost three years, including some of the most difficult market situations possible for this particular trading system. You will see for yourself, that this strategy simply works amazingly well and is as robust and reliable as it gets.
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Keys to this forex strategy
It is based on three fundamental elements:
(in order of importance)
Averaging
Averaging, when done correctly is one of the best method of money management you can use in forex. Incorrect use includes trying to fight a major trend. Long lasting trend might go on for months and years. Trying to fight it with averaging would make you open hundreds of positions with ever growing loss. There are only a few accounts in the world that could survive such a treatment. Please do not ever try it.
Averaging as suggested here, is method to go, when you want to profit from short term price fluctuations that are moving against the direction of main trend while you respect the main trend.
So key to profit from averaging is to identify the trend and then be able to trade on the right side of the market. Positions that are left hanging in loss are therefore overcompensated when we open multiple order on the right side of the market.
Let's look at the daily chart of EURUSD.
If we tried to average our positions against the major trend lasting from October 2014. We would have been ruined.
By simply adding slow MACD to the equation we would perfectly avoid entering 99 percent of positions going against the major trend. Couple of buy position that are left opened would be overcompensated by opening huge amount of sell positions. Practically every single position opened since downtrend inception would end up in profit.
Overcompensating by scalping.
It is inevitable that at the trend reversal some positions would be left unclosed and can reach up to couple thousand pips of loss. This would have been unpleasant. Therefore, we make sure that we open thousand of scalping positions going with the trend after its reversal and thus compensating for any loss created at the other side of the market.
This might sound complicated but its really easy once mastered.
So Let's begin.
First we need to apply MACD (moving average convergence divergence) 240,520,9 in the 1 H chart. MACD will make sure that we never ever fight the major trend. Signal lagging is not a problem as with averaging we are able to liquidate almost all of positions on correction. We do not have to be accurate. We just need to recognize the trend and don't fight it.
Signal:
Signal is not that important. We may use envelopes breakout, bollinger bands breakout, overbought/oversold zones on RSI, fractals, or any other method that is suitable for us. With this forex strategy, price of entry is not that important. It's all about the bigger picture and going with the flow. You will have plenty of opportunity to average your positions and scalp. So there is no need to be stressed about couple of pips in entry timing.
This is all about position management.
SELL:
MACD histogram closes below zero. This signalize downtrend and we must take only short trades. This is crucial !
We enter the trade based on our chosen signal and we will use two methods of position liquidation simultaneously.
A: scalping: Position moves to profit of 9 pips, before reaching loss -30 pips. Liquidate position as scalping entry immediately.
B: averaging: position moves to loss of above – 30 pips. Add it to averaging category.
Next trade can be opened only on better price. This means that another trade will be opened only above the first one. Again it can be liquidated as scalping position (A) or it can move to loss again and be added to averaging category.
Common take profit for averaging positions is 20 pips (measured from average price). We have risked so we will therefore ask for more.
BUY:
MACD histogram closes above zero. This signalize uptrend and we must take only long trades. This is crucial !
We enter the trade based on our chosen signal and we will use two methods of position liquidation simultaneously.
A: scalping: Position moves to profit of 9 pips, before reaching loss -30 pips. Liquidate position as scalping entry immediately.
B: averaging: position moves to loss of above – 30 pips. Add it to averaging category.
Next trade can be opened only on better price. This means that another trade will be opened only below the previous one. Again it can be liquidated as scalping position (A) or it can move to loss again and be added to averaging category.
Common take profit for averaging positions is 20 pips (measured from average price). We have risked so we will therefore ask for more.
Notes:
There is plenty of evidence, both from live trading experience, testing and just a common sense, that this approach works. It is also not that risky. To trade 0,01 micro lot and 1 currency pairs about 500 USD are necessary. Profits can reach up to 200 percent a year. Drawdowns are not that bad, but prepare to have about 200 of opened loss at the time. Strategy is always adding a capital to your account, both by closing scalping entry and by closing averaging positions.
Try it first on demo. This forex strategy is aggressive and not suitable for anyone. If you have any questions do not hesitate to ask.
