Forex trading, simply put, is the act of dealing, exchanging, buying and selling currency in order to increase the value of a selected currency for profit. This article will briefly discuss a simple Forex trading system known as the 4 weeks rule by which an individual can take advantage of several Forex trading techniques, methods and strategies in order to maximize gain and minimize loss in the long-term and then move on to explain how best to go about Forex trading.
Before we start it must first be stressed that one Forex trading system will not work for everyone. In most cases one system is cross referenced with another in order to increase the probability of success and minimize unnecessary loss from false trends or ill-timed entry and exit; not to mention the fact that one system will work better for others because he or she is a better fit for that system.
First, currency that peaks into a 4 weeks high should selected then the trader enters that particular market, holds the position until it dips into a 4 weeks low, at which time the trader liquidate the long and goes short. Keep doing the same as new four weeks highs and 4 weeks lows are hit, making sure to keep an open position in order to be in the perfect position to catch a trend when it breaks out.
Why does this work? It works because it takes advantage of 2 simple Forex trading truths. First a simple trading method is tougher to break and every currency in the market continuously trend in the long-term but the best type of trend for profit are those that a trader rides from the start-up to the finish. Does this sound logical to you? Well if it does then read on, if not then read again and again until the logic sinks in. Remember, even the simplest Forex trading system should be read at least thrice in order for the concept to properly sink in.
Now let us say the consumer does not believe the long-term profit is worth the drawback period? Then go back to the basics and use filters and carefully read signals to cross-reference the best time to enter and/or exit a particular market. For example, Mr. A instead on relying solely on the 4 weeks rule will augment the same with the Relative Strength Index (RSI) to make sure that prior to entry the trend is actually strong and true. Using the Exponential Moving Average (EMA) may also be possible to determine the average closing price of a currency within a specified period of time for a proper exit strategy.
What all these means is that beginners in Forex trading should concentrate on the basics and then slowly expand their knowledge base with training and experience to be able to put together their own simple Forex trading system.
Before we start it must first be stressed that one Forex trading system will not work for everyone. In most cases one system is cross referenced with another in order to increase the probability of success and minimize unnecessary loss from false trends or ill-timed entry and exit; not to mention the fact that one system will work better for others because he or she is a better fit for that system.
First, currency that peaks into a 4 weeks high should selected then the trader enters that particular market, holds the position until it dips into a 4 weeks low, at which time the trader liquidate the long and goes short. Keep doing the same as new four weeks highs and 4 weeks lows are hit, making sure to keep an open position in order to be in the perfect position to catch a trend when it breaks out.
Why does this work? It works because it takes advantage of 2 simple Forex trading truths. First a simple trading method is tougher to break and every currency in the market continuously trend in the long-term but the best type of trend for profit are those that a trader rides from the start-up to the finish. Does this sound logical to you? Well if it does then read on, if not then read again and again until the logic sinks in. Remember, even the simplest Forex trading system should be read at least thrice in order for the concept to properly sink in.
Now let us say the consumer does not believe the long-term profit is worth the drawback period? Then go back to the basics and use filters and carefully read signals to cross-reference the best time to enter and/or exit a particular market. For example, Mr. A instead on relying solely on the 4 weeks rule will augment the same with the Relative Strength Index (RSI) to make sure that prior to entry the trend is actually strong and true. Using the Exponential Moving Average (EMA) may also be possible to determine the average closing price of a currency within a specified period of time for a proper exit strategy.
What all these means is that beginners in Forex trading should concentrate on the basics and then slowly expand their knowledge base with training and experience to be able to put together their own simple Forex trading system.
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