Best forex trend trading strategy
I also lay out a few of those reasons in a more light-hearted tone in my Scalp vs Swing Article which has gotten a lot of attention. I have had many traders say something like this to me: I am best forex trend trading strategy using a long term strategy, trading the hourly charts. See, I think the above statement is one of the issues with Forex Traders today and why so many have a lot of trouble being profitable.
In the above chart, you see that there is a lot of bullish momentum best forex trend trading strategy toward higher highs. If we move a little bit ahead in time, you can see a bearish bounce off the resistance level.
To the trader viewing only the 4HR chart, this may look like a great time to buy again in anticipation of Bullish trend continuation…. What the 4HR trader may not realize is that this is not a pullback of the 4HR trend, but rather a continuation of the Weekly trend.
So to the 4HR trader, this looks like an unexpected major reversal in the market, but to a long term trader, it is an obvious and expected continuation of market flow, looking like this on the Weekly view:.
Again, so many people looking at 4HR charts think they are long term traders, but they are ignoring the real long term time best forex trend trading strategy that can get you into big trouble just like in this real life example… Those two bearish weekly bars you see would crush someone trying to take long positions on the 4 Hour chart, yet they are just part of the flow on the Weekly view.
Now, I am not saying that you cannot trade profitably on the 4HR charts; I am saying that it is very difficult to make consistently profitable trades when you do not have a good perspective of the markets longer term movement—especially when trying to trade an intermediate time frame like the 1 or 4 hour time frames.
One major note about this strategy is that you must be disciplined if you want to succeed. One of the biggest mistakes that unprofitable traders make is over-trading and over-managing their trades. As human beings, we have the desire for action and involvement which tends to cause us to always want to have a trade open or always want to manipulate the trades best forex trend trading strategy do have open, and I can promise you that this will only lead to best forex trend trading strategy and less profitability.
Looks for trends on these longer term charts that have good momentum in the respected direction. Identify the direction of the trend bear or bull and make a note to only look for entries in the direction of that trend for instance, if it is a bullish trend, look for buys. In other words, the criteria has lined up for you to make a trade, now all you need is the signal to confirm your forecast.
For this strategy, the signal is a momentum daily bar in the direction of our long term trend. An ideal daily signal candle will have a tail that has tested pierced through the Fib level, but then reversed back into the direction of the trend:.
Place your stop and target. Trading is all about Math—a good strategy has winners and losers, but at the end of the year, the winners out-weigh the loser. They will in the best forex trend trading strategy if you follow it with discipline! Hope you guys enjoyed learning one of my favorite long term strategies. Please leave a comment with any feedback.
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