Forex Strategy And Profits

A lot has been said about buying low, selling high; don't ride your losses; always take Forex profits; and other unspecific pieces of advice to the novice Forex trader that looks great on a poster board, but does nothing when you're in front of your computer screen.

Everybody has their own style of trading Forex. That's not to say there are no two styles that are alike. It's not even to say that you need to create your style of trading. There is no reason to reinvent the wheel. There are plenty of styles and methods and philosophies to choose from and at least for some, they are successful. But all that is theory.

When you click on the “buy” button or “sell” button, that is when all Forex strategy takes a back seat to practicality. Once you're in the market, you want to know when to get out, or how long to stay in. These are the nuts and bolts of trading Forex. Theories don't increase a person's margin. Buying and selling does.

Like everything else, there are several tacts available for how long to stay in a trade. When to get in, and when to get out. These really boil down to profit/loss ratios, because if you're willing to ride your losses and you're cutting short your profits, your longevity in the world of Forex is going to be severely limited.

A sensible profit/loss ratio should be adhered to, however the word “sensible” is a rather value-laden term. There are Forex traders who use a 1:3 risk/reward ratio in their trading. This boils down to risking 100 PIPs on the loss side, while riding out a profit for 300 PIPs. To some, this is a nice ratio because the trader is bound to maximize his Forex profit with a relatively limited risk on the loss side. The downside to this Forex strategy is having to ride out that substantial profit margin with the faith that the market will not turn. It's very dependent on a sustained movement on the profit side.

On the other end of the spectrum, many Forex traders use a 4:1 risk/reward ratio. They are willing to risk 400 PIPs for a 100 PIP profit; or any variance of such (risking 100 for a 25 would be the same). This might seem foolish on the surface, but for many it means they can take quick Forex profits while still being able to withstand a temporary setback in the market.

Most experienced traders agree that particularly for the less experienced trader, the ratio that makes the most sense is a 1:2 risk/reward. That way you don't have to ride out profits, and your losses are relatively painless. The most important factor, as always, is discipline. Stick to your guns and it will work out.

Don't forget your stop-loss orders and raise them (or lower them) accordingly. If your goal is a 100 PIP profit and the market has moved 50 PIPs in your direction, you should move your stop order up (or down) 25 PIPs. Stop-loss orders are as much about protecting profits as they are about cutting losses. Once you're out...you can always get back in.

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Recently I was given an article from a friend of mine about trading profitably without the use of any indicators, Forex strategy, or tools. Immediately I thought hey this is a big crappy thing and I was going to waste my time with this massive report and I was not going to read it. Only until my curiosity kept asking myself what if this is possible? So I decided to give this a peep and try to understand if it can make sense.

 

Forex Indicators

I must say, I started reading already thinking that this is something not possible and that not using indicators is like trying to drive a car without a steering wheel. Never mind, I started reading and found out that one can possibly trade using support and resistance points as the only Forex strategy to identify trading entries and exits. I am still a little puzzled here.

Now, I still am reading this report because it is a thick one to read, but it got me into the topic as yet and I shall share with you the results of this amazing thing once done with it. Before I publish any information however I shall try this Forex strategy a little on a demo account to see if this is possible and feasible in order to avoid hassles to you people out there reading and following my posts.
So keep a very open eye to my posts for further developments on this hot topic!

Support and Resistance

Until now the findings were interesting however as a principle as they are facts just the same. Let me explain this a little to you in order to get on with me on this. If you open up any chart you can immediately spot points of support and resistance and of course with the correct patience one can try follow these points and use them as entry and exit signals in a Forex strategy. Till here it is ok and the principle is just fine. Now how can this however be a possible long term successful Forex strategy trading method? Is it possible? Have you ever used S&R as your entry or exit points?
If you did get in touch and lets discuss this strategy.

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