Simple forex strategy. You can trade forex with $10,000 demo http://bit.ly/trade-web
I just want to share my thoughts on the recent EUR/USD trading. The price is basically moving in two ranges, and it kind of makes sense to set up a range strategy at the moment.
So, when prices are moving in a range, defining the high and low levels of that range is most important. These are the well-known support and resistance levels in price action trading.
To check whether one level is really an important one, you must scroll back on the chart and see how people reacted to that level in the past. When one level has been both support and resistance, that is confirmation this level is important!
Once we have the key levels, the rules of our strategy are simple: Sell the tops and Buy the bottoms.
You can see that when price is close to the resistance level of 1.1480, you obviously sell the pair, but what if the price breaks out of the resistance? In our case, the Euro price finds its next resistance near the 1.1550 level, which is actually the support level of the upper range. Then, the price moves back to the lower range.
So, if the Euro price keeps moving in the lower range, we might expect it to rebound from the 1.1320 level again.
Your forex strategy is simple math. If you want to use risk reward 1:2, for example Stop loss 30 pips and Take profit 60 pips, you would need 35% winning trades to keep your balance positive. If you use risk reward 1:3, you would need 30% winning trades.
Whatever strategy you use, you can’t expect to win every trade, but it is important to limit your losses and increase your potential profit.
Disclaimer: Please note this video is for educational purposes only, and it is not financial advice. You should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, only as an expression of his opinion.