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You can build one easily by utilizing free information on the web.
We are going to look at choosing a methodology, structuring the system and implementing it for profit – It will give you big profit potential and won’t cost you a cent.
The methodology below is the basis for all my trading systems and its very simple. I have traded for over 23 years and tried just about ever system out there and the fact is:
When trading FOREX, simple systems beat complicated ones, as they are more robust in the face of ever changing market conditions.
The methodology below works and will continue to work, so let’s take a look at it.
1. Methodology
Look at any FOREX chart and what do you see?
Long term trends that last for weeks or months – These are the trends you need to target.
To target these trends all you need to understand is the concept of support and resistance and price momentum.
Now we need a methodology, let’s take one that has stood the test of time and will continue to work – trading breakouts.
Breakouts from significant support and resistance are one of the most effective ways of catching the big profitable moves.
FACT: Most major currency moves start from new market highs NOT market lows.
You can read all about the above concepts free on the web and in some shape or form most of the worlds top traders use breakouts.
In conclusion, we are going to look for long term trends from support and resistance - now let’s look at how to put this into practice.
2. Structuring a System
Now you need to organize the above and enter some trades – Here is a simple way of trading the above:
• Look at the weekly chart
Look for well established support and resistance that has been tested several times preferably at least 4 times and several weeks apart
• Look at the daily charts
Now look for tests that coincide with the weekly levels that have again been tested several times.
NOTE:
If you start with the weekly chart you will get the big picture and well established support and resistance can be seen - that if broken will give you high odds of the break continuing.
3. Timing the trade
Here we need to look at price momentum and trade with confirmation that the odds are in our favor.
Trading with price strength on a break is an essential element of any successful FOREX trading system and you need indicators that will help you spot it.
Pull up a free chart service such as futuresource.com
Look at the stochastic indicator and Relative Strength Index ( RSI), both these are fantastic confirming indicators.
We don’t have time to write about them in detail here but they are covered in our other articles so look them up.
If a break occurs you can go with the break providing your momentum indicators confirm it.
If you are only trading strong support and resistance that the market recognizes as significant then the odds of the break continuing as stops are unwound and trend followers come in is higher.
Stops should be below the breakout point on daily close basis only (US hours) you can also wait till the end of the session to enter your trades.
This system won't give you many trades each year, but the ones it will give you will have high odds of success and fantastic profit potential.
The FOREX Trading system above can be adapted, but its an excellent base to start from and is perfect for novice FOREX traders.
Take a look at this FOREX trading system because:
Its simple to understand, simple to apply, takes less than 30 minutes a day and can yield triple digit gains
Even better it costs you nothing, but could make you significant long term capital gains.
Don’t spend money on worthless e-books selling systems they have plucked from free information on the net build your own.
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