Every time I say that it is not hard to find a winning Forex Strategy I always get comments and emails saying , it is so hard. I am going to prove that a strategy does not have to be complex to be a winner. I will be trading this strategy this week and we will see how it works.
The trick is don't make it too difficult and make sure you follow your trading plan and money management rules. Record everything and analyze results afterwards.
This is called the support and resistance trading strategy.
Identfy Trend on 4hr chart
Step two: Identify 3 support and resistance levels
I have identified the support and resistance levels here on the chart. Yellow is resistance and Light Blue is the support.
Note: you can see all the support and resistance levels I plotted but you cannot see where they all orginated because I don't have room in my blog to post the chart.
Step 3: watch all the support and resistance levels and trade those levels.
For example watch the first resistance at 1.3973 and see what the price does with it. If if bounces look to go short if it goes through watch the trend line and then look to go long.
The target is always the next support or resistance level. Never trade for short gains always attempt to ride out the trade until you hit your target.
Buy two lots and sell the first lot at the target and keep the second lot open to attempt to catch a larger run.
Always set a short stop to keep losses low I set my stop according my account value usually at 1% of total value. I try to keep it at 30 to 50 pips.
Step 4: Record Results
Record your results and see how it works than adjust if needed. I am going to be trading this strategy on the blog this week so come back and check to see how it works. Or trade along and let me know what you think.
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