Strategy "Foundation" - it's time to earn money!
Profitable Forex trading is impossible without a proven trading strategy. Most of the systems for making money that can be found freely available on the Internet turn out to be useless in practice.
The main reason for this is the imperfection of indicators as an analytical tool.
An effective strategy must be based on statistically proven results and fundamental analysis.
During the training process, fundamental analysis is mentioned for informational purposes.
Everything that novice traders know about it is limited to macroeconomic factors and the calendar of publications of significant events that can affect price fluctuations in exchange rates.
Mentors claim that for profitable and stable earnings it is enough to master several techniques of technical analysis and know the functionality of standard oscillators.
Stock indices as a reliable fundamental indicator
Names such as Dow Jones index Almost everyone has heard of the S&P 500, but few could think about using these indicators in trading on the foreign exchange market.
The mentioned indices are key indicators of the US stock market. The Dow Jones Index is calculated based on the average stock price of large American industrial companies, and the S&P 500 includes 500 companies with significant capitalization.
In addition to those mentioned, there is the NYSE index, which is calculated by taking the average of all securities that are traded on the New York Stock Exchange. It is this indicator that most accurately reflects the current economic situation in the United States.
Important! The growth of the NYSE index does not mean that the USD will strengthen against other popular currencies. Quite the contrary. Shares are a less liquid but more stable investment. Therefore, the upward trend of the NYSE chart stimulates the investment activity of investors.
The collapse of the stock market leads to a massive outflow of capital, which is directed into US government bonds.
At the moment, this is the most stable asset through which it is possible to preserve capital. Most experienced investors use US government bonds as a way to diversify the risks of their investment portfolio. Warren Buffett formulated the “golden” rule for investors: 70% in stocks and 30% in bonds.
Indicators of the NYSE stock index can also be effectively used in trading on the foreign exchange market. When trading on margin, the correct application of this tactic will allow you to earn up to 300% per annum with relatively moderate risks.
Forex trading using NYSE quotes
To trade, you will need to study several reversal patterns of the Price Action system. Particular attention should be paid to models:
Rails;
Pin bar.
These signals are processed in 97% of cases. The “foundation” strategy involves analyzing 2 price charts:
1. NYSE quotes (available online on specialized services for free and without registration).
2. Chart of the USD/CAD currency pair. The correlation coefficient of this asset with NYSE quotes is -1 due to fundamental factors.
The USD/CAD pair was not chosen for trading by chance.
In fact, the dynamics of this chart reflect the current level of supply/demand for the US dollar. The investment attractiveness of the Canadian economy is significantly inferior to the demand for US government assets. To carry out the analysis, you should set the chart period to D1, since there is practically no market noise at high intervals. To make a trading decision, you should wait for the formation of a reversal pattern.
The image shows a chart of the NYSE index with a period of D1. The formed pin bar is circled in red. The next candle is closed in an upward direction, which confirms the predominance of an upward trend.
To open an order in MT4, you should completely wait until the confirmation candle closes.
In the example, a candle is circled, at the base of which a Sell order should have been opened.
Potential profit is 200-300 points. It is recommended to use the Traling stop option every 100 points to move the safety order to breakeven. Stip Loss should be set at the nearest local level from the entry point. To increase profitability, it is possible to use key stock indices of other trading platforms:
• London Stock Exchange – GBP/EUR pair;
• Tokyo Stock Exchange – JPU/NZD or JPY/AUD pair.
The use of indicators to confirm the correctness of the forecast is prohibited.
This will lead to late opening of trading positions, which will negatively affect trading. Using the “Foundation” strategy is also possible on binary options. The trading rules in this case are similar. It is recommended to work with a broker whose terms allow for the possibility of early execution of a contract and the opening of transactions with an expiration period of 24 hours or more.
You can choose a broker here -
http://time-forex.com/brokery-opcyonov Signals based on the “Foundation” strategy are processed with 99% accuracy. It’s easy to check it yourself and make sure the system is effective.
The only drawback is the rare formation of such significant patterns. If you follow capital management standards, your monthly profit will be from 20% to 30%.