If you have been reading up forex books or courses, you will have heard of the phrase “The Trend Is Your Friend”. Indeed I will strong recommend new traders to trade with the trend instead of against it.
Trading against the trend is only advisable for those experienced traders who have a feel of the market. Therefore in this post, I will be sharing with you my forex trend trading system so that you can try it on your demo to see if it works for you.
What You Need To Trade The Forex Trend Trading System:
How To Trade The Forex Trend Trading System:
First of all, you need to plot the 200 EMA as this is an indicator that you can use to tell the current trend and strength of the market. If the 200 EMA is sloping upward with steep angle, you are seeing a strong up trend. If it is sloping downward with steep angle, you are seeing a strong down trend.
I will strongly advice against you trading when the 200 EMA are pretty flat as there is no trend in action.
What we are actually doing when performing this forex trend trading system is to BUY THE DIPS and SELL THE RALLY. When you are in a strong uptrend, you will wait for the price to retrace (DIPS) and then BUY in. When you are in a strong downtrend, you will wait for the price to retrace (RALLY) and then SELL.
In order to do this perfectly, we need the help of the forex stochastic indicator. When you are in an uptrend, you will wait for the price to retrace until the stochastic show sign of oversold. At this time, you will make use of the forex Fibonacci indicator to check if there is a strong level of support or resistance like the 0.382, 0.500 or 0.618 levels.
If the price hits a major Fibonacci level and the stochastic is showing sign of overbought or oversold. It is a good trading opportunity.
I will suggest you to try this strategy out on your demo account and see how well it works. Practice it until you are able to execute it with ease and I believe you will start to see profit.
Note to Readers
Do note that the above strategy is a general forex trading strategy that has not been fine tuned. In order for you to trade with it, please fine it tune on a demo account. If you do not know how to fine tune a strategy, please read the below
For those of you who are totally new to forex trading, I will suggest that you read through this blog post that I have written for beginners
If you are interested to learn how I do my forex technical analysis, you can take a look at the post below