Learn Currency Trading - A Simple Strategy for Huge Profits

By: Kelly Price
If you want to learn currency trading then you need to have a plan and that means a logical and proven forex trading strategy to help you enjoy currency trading success. Here we are going to give you a trading strategy that works and you can learn and apply it in about week!

The first point to keep in mind when learning currency trading is its not complicated - simple systems work best as they are more robust in the face of brutal market conditions and have less elements to break.

The other point you need to keep in mind is you want a forex trading system that will work now and in the future and is based on sound simple logic you understand.

When learning currency trading you not only need a method but you need one that you can have confidence in. If you don't have confidence you won't be able to apply your method with discipline (and this is essential when you hit a losing period) if you have no discipline to apply your method - you have no method! So what is the method?

The method is a breakout strategy.

Most traders try and buy low and sell high but that involves prediction and if you predict you're simply hoping or guessing and that isn't a way to make money.

To make forex profits you need to act on the reality and trade it when the odds are in your favour.

Why Trading Breakouts Works

Fact: Most major trends start from new market lows and highs and this is a breakout.

The price simply makes a new high or low and accelerates and a new trend develops. Look at any forex chart and you will see this. Now its human nature not to trade these moves and most traders don't - why?

Because they want to wait for a pullback and get in at a better price and prices simply don't pullback. The trader who can go with these moves has the odds on their side. Sure, you don't get the best price but if the move continues from your entry point and piles up big profits who cares? Not me or you, if were piling up big profits in a strong trend!

A Simple Method for Success

So we know a breakout strategy is based upon sound, timeless logic and a forex trading strategy based upon it, will work. The question now is - how to execute correct market timing and get a trading signal in the market, when the odds are in our favour?

This is not complicated; all you do is look at support and resistance that is considered valid. By this we want at least 3 tests and we want them in time periods that are reasonable distances apart and the more tests the better.

When the break comes, you need to execute your trading signal - but first you must check price momentum and confirm the move. Not all breakouts continue, some are false and come back. You need to avoid taking false ones and for this, you need to use some timing indicators - to confirm the price is strengthening as the breakout occurs.

Confirm Confirm Confirm!

We don't have time to discuss momentum oscillators here (simply check our other articles) but two good ones to use are, the stochastic and Relative strength Index (RSI). There simple to use and are visual, so you can learn them in about 30 minutes.

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