Simple forex strategies can be the platform of a whole trading system. A simple plan will perform better across several different markets. The entry point is the most basic of simple forex strategies. Establishing an entry point in a trade can serve as a real good starting point.
SIMPLE FOREX STRATEGIES HELP YOU TO TRADE PROFITABLY
There is a tendency among new traders to feel that they need an intricate and fancy piece of software for trading or an indicator that is complicated to do forex trading successfully. This is a gross misconception. Simple forex strategies may work as well as complicated indicator based systems or forex trading robots. As the beginners settle down in forex trading, they begin to understand that the price chart is the most important source of information that motivates them to enter or exit a trade.
The ten-month moving average indicator and the price action analysis are the easiest of the simple forex strategies that you could ever follow. This is because of the fact that price movement creates its own signals about the market direction and once you learn to analyze the price action, it will allow you to time your exits and entries with pretty good accuracy.
People often have a tendency to go with an egotistical obsession on making forex trading more complicated than it actually is so that they can boast to their peers about how they are using the fancy sounding indicators to trade with. It is wiser to stick with simple forex strategies.
STARTING POINT WITH SIMPLE FOREX STRATEGIES
A simple entry strategy will require few criteria to be met. Initially, there will be a minimum number of calculations that will be applied in establishing a perfect entry point. These calculations have to be performed infrequently. The strategy has to use the least amount of technical indicators. This makes the interpretation of the signal much easier with simple forex strategies.
A ten-month moving average is an indicator that can be used in the beginning. You can enter into a trade when the price goes above this moving average. You can calculate the average by taking the closing price over the preceding ten months and dividing by ten. This process has to be repeated at the end of each month. You have to remove the oldest month and add the most recent month to the calculation. You have to remember that this strategy is not meant to promote scalping procedures.
PRICE ACTION ANALYSIS IS ONE OF THE MOST EFFECTIVE SIMPLE FOREX STRATEGIES
Price action analysis is also known as price action trading. This is the skill of learning to analyze a raw price chart without the help of indicators. You have to take into account the naturally occurring and the repetitive patterns of currency prices as a result of the daily movement in the forex market. You can then combine these patterns with the resistance and support levels to complete the set up. This is one of the oldest among simple forex strategies which have been used for centuries as the rice merchants in Japan who formed the Japanese Candlestick Charts used this price action analysis trading in the eighteenth century.