Here we will look at a simple Forex trading method which can be learned by anyone quickly and makes huge gains. The Forex trading strategy enclosed is perfect for novice traders, as well as seasoned professionals so let's take a look at it in more detail.
The strategy we are going to look at here is Forex swing trading which aims to take advantage of moves that last between a day or two and around a week. If you look at a currency, you will often see a short sharp prices spike up or down and it never lasts very long. These spikes are caused by the emotions of greed and fear. Prices get pushed to far from fair value become overbought or oversold and then, return to more realistic levels.
The aim of swing trading is to sell into greed and buy into fear and make a quick profit, as the price moves back to fair value. Let's look at a simple Forex swing trading strategy to take advantage of this. Our example below, is based on a price spike to the upside but the same logic of course works in bear markets too.
1. Look for a strong move to the upside which accelerates away from the main trend.
2. Check to see how overbought the market is and for this you will need some momentum indicators. There all visual and easy to learn, so pick a couple you like. The best in my view are the ADX,MACD,RSI and the stochastic.
3. Once the indicators are indicating overbought levels, wait for them to turn down as the price still rises. This is known as divergence and is a signal, the current move is ending so go short.
4. Your stop is placed above the price, behind a resistance level and you set a target just above the level of support you think the price will pull back too. Don't wait for support to be tested, just in case the price bounces back against you, take your profit in and wait for the next set up.
5. Be patient when swing trading and try and always sell markets which are very overbought. Keep in mind, the more overbought a market is the better the odds of a good down swing, will occur when the market eventually breaks down.
The above Forex trading method is simple, powerful and will always work because humans make markets and greed and fear will always cause price spikes. So if you want to enjoy long term currency trading success, use a Forex swing trading strategy and start making great profits in 30 minutes a day
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