In terms of Forex strategies, the one we are going to look at in this article is the best to get in on all the best trends and profits.
The real money is made from catching the big trends which last for many weeks and this strategy, will get you in on ALL these big profitable moves.
Most traders make a key error when they trade Forex because, they think they need to buy low and sell high to make money but if you try this in Forex, your going to lose – why?
Because if you want to buy the low, your going to have top predict it and that’s another word for guessing! The pro traders know, the real way to make money and its based on, how every big trend starts and continues:
All big bullish trends, start by breaking overhead chart resistance and make new highs then, as the trend unfolds, it keeps doing this.
Look at any chart and you will see this is true, more professional traders base their strategy on breakouts than any other and you should too if you want to enjoy trading success. Sure, most traders don’t buy breakouts but that’s no problem really, its an advantage – as most trader lose money!
So let’s trade the way the pros do and buy breakouts; lets look at how to do it correctly.
You don’t want to trade just any breakout, you need the level to have been tested several times before the break and I would recommend at least six tests.
In addition, the further apart the tests are in terms of time the higher the odds of the break occurring, so look for a minimum of 2 tests to be at least six weeks apart.
When the break takes place you go with it and buy and sure, you haven’t got in at the low but what you have done is entered the market when the odds are at there best and if its a really good breakout, you could have huge profits ahead of you.
Stops are always nice and close in breakout trading and are just below the level of resistance which has given way which now acts as support.
You can use some indicators to help your market timing and check if price momentum is strengthening and good ones to use are – the stochastic, the RSI and the MACD.
When trading breakouts be patient and wait for the best opportunities, with your reward on the best breakouts being up to 10 times what your risking, this is a great way to trade.
If you want to make money in Forex, don’t think buy low sell high, like the bulk of losers – think buy high, sell higher and you will have, a simple Forex strategy which can make you big gains.