Forex Secret Trading Strategies
If there were any forex secret trading strategies they could include these indicators, methods and information shown below;
Amongst traders winning competitions and rumors of how successful traders operate, this list has been compiled to include some of their methods. You will have to work out the finer details and how to put them into practice to make them work for YOU.
Forex secret trading idea's and methods, can be said to be the building blocks that some successful traders use. These traders build well thought out strategies based on some of the basic information shown here. It may be surprising to find out that their secret methods are not as complex as a newbie may think.
The basic precepts are labeled on the chart as shown above. We will consider each one.
Price moves in waves on every time frame.
Label 1 on chart shows downward zig zag formation. (3 wave pattern).
Label 2 on chart shows five leg wave pattern, we can call this an impulse. Or think of it as two zig zags sharing the middle wave. (ie The last wave in the first zig zag becomes the first wave in the second zig zag).
When price decides to move higher or lower, it will do so by means of waves.
Prices respond to natural square levels.
Label 3 on the chart shows how price often stalls or reverses very close to natural square levels. These areas can be used as early warning signs of high probability end or start of price moves. Once natural square levels are placed on the chart, take a look into how they CONFIRM normal support and resistance levels where "everybody" is buying and selling. Once price moves through these areas any retracements back to these levels present excellent buying and selling points. Remember that once price moves through resistance, in a large percentage of times this area becomes support. Or for short positions, once support is breached, this area becomes resistance if price tries to move up through that level again.
Master traders like waiting for double or triple tops or bottoms before entering a position. How much better when we can do this near natural square levels.
Read more about natural square levels here.
Maths proven for bollinger bands.
Label 4 shows us the mathematical probability is greatly increased when price reaches the outer bounds of the bollinger bands. Once price moves into the outer bands there is a higher probability that price will reverse from that situation. It is essential to use the bollinger bands under the correct conditions. For example when price is trending and reverses into a bollinger band area this is a good place to enter the position in line with the trend. Bollinger bands also work well in sideways market conditions.
Exponential moving averages more powerful than you may think.
This is probably the most important forex secret trading tip out of all those presented on this page.
The red and the blue lines on the chart show exponential moving averages. Novice trades seem to be introduced to them at the beginning of their trading education but then for some reason not proceed to fully master them. Simple cross over techniques produce somewhat ordinary results, nothing spectacular.
Don't be fooled into thinking that using moving average crossovers is for amateurs. Edward Burke proved this by winning the 2008 CNBC Million Dollar Portfolio Challenge simply by using a combination of short term and long term moving average crossovers. A portion of his concluding remarks in his ebook, he says ... "I had a fantastic experience implementing this system and winning the CNBC Million Dollar Challenge. I was able to hold my own against some of the sharpest trading minds in the world".
Indeed Ed did, he beat over 254,000 other traders to win the event with what? A well thought out and tested moving average crossover system! The exact entry and exit rules based on this strategy are revealed in his ebook entitled
How I Won : Making Money In Stock Trends.
Even though the book is entitled "stock trends", Ed used the system to make about 700 currency trades over a four day period to blitz the competition.
I would recommend this book to all types of traders, whether they be stock traders, forex traders, commodity traders etc. The system also works on every time frame imaginable, from minute charts to weekly, monthly, quarterly or yearly charts.
The use of moving averages is a absolute gold mine for automated robot builders. Fantastic programing opportunities to test different moving averages and different time periods. Learn about automated forex robots here.
The forex secret trading indicators and methods shown above should be enough for anyone to go and test some extremely powerful strategies. With the help of forex simulator software like "Forex Tester" it's easy to test different strategies and custom indicators within a short period of time. Read more here.
To take a look at how some traders put their systems together with great success visit brainyforex free trading systems.
But first we MUST consider;
Before opening a position try and have your profit target larger than your stop loss. Why? Because if your system only achieves a 50% hit rate (random) at least you will make some money.
On the left hand side graphic of my order placement panel we see that I am about to place a sell (go short) order for the EUR/USD currency pair.
My forex brokers software tells me what my potential profit and potential loss will be when I enter my profit target and stop loss level. As seen on the bottom of the panel we see the profit target of 186 pips will result in a profit of $372.60 and a potential loss of $111.40. (56 pips).
I can play around with the contract amount of 20,000 units, either increasing or decreasing the amount of units to ensure my potential loss is manageable should the trade go against me. Learn more about position sizing here.
Forex secret trading indicators and methods will only work if you put in the practice to master them. If you spend the time back testing and forward testing you will discover there are indeed secrets that will prove successful.
Also, don't be afraid to share some of your forex secret trading indicators or methods with others as the forex market has over 3 trillion dollars moving through it daily. It would be very difficult to make any impact on it. Even if you did, it would probably help your trading as the market would start behaving according to your system. There would be a sector in the forex community that would be driving the market into certain directions based on your system. Now can you imagine that happening? Don't think so?
Enjoy reading about forex secret trading information? Complimentary information also presented in the forex tips section.
And also in the learn forex section.
Putting Gann's techniques into practice analyzing the Euro. See how to apply his knowledge to the real market. Go here.
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