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Forex Trading Strategy - Prepare Your Chart

I can think about few business endeavors that don't incorporate some kind of daily, weekly, or monthly planning. Trading Forex isn't any different. When you take a seat for an unprepared chart you have little idea why one trade might run forever and the other activates a dime.

This is easily solved by preparing your chart. Probably the most frustrating thing about becoming an unprofitable Trader isn't knowing why a trade worked in your favor and why the following trade did not. This leads to a failure to decide where to trade from, when to take profit, where you can place your stops, so when to cut a losing trade. Inevitably, losing trades far outpace in both number and size the profitable trades. A prepared chart will allow you to take trades with less risk which translates to smaller losses and much more frequent gains.

The Forex currency trading strategy parts of every Forex forum website are probably the most popular. Admit it, if you are an unprofitable trader how many hours do you spend reading the latest brain-fart from some who swears that because two trades worked that she or he has found the following best system.

forex scam

The reason the forum strategy gurus always fail and can continue to fail is that they concentrate on all the wrong things. They've so many rules and indicators and spend a lot time adjusting those rules and indicators that they your investment most important thing... it is where you trade from which makes a big difference.

Do this exercise and see exactly what a difference it makes. I refer to this as my " setup method #2." Pull up a regular chart of the favorite pair. Zoom out until you can see 8 weeks worth of price data. For instance, it's July now, so pull-up a chart and make sure you can observe the daily candlesticks for May and June. Place a horizontal line in the high of June, our prime of May, the low of June, and the low of May. You should now have a chart with four lines. There you have it!

Now hold back until price approaches the area of 1 of your four lines. You can trade any timeframe, but only trade when price is approaching one of these simple four lines. Only take a trade when:

   Price is touching or is not far from your lines AND
   Your trading system provides you with an indication.

Ignore all other signals that occur from wrinkles. As price approaches the areas on my pre-prepared chart, I look for simple price action candles, however, you may use candlestick patterns as well as that latest, greatest strategy you found in a Forex forum.

Doing this will allow you to trade less and trade from better places. Observe how much better even the worst system performs when you take signals generated only when price is near an important place.