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 have thought about using these indicators in trading on the foreign exchange market.
The aforementioned indices are key indicators of the US stock market. The Dow Jones index is calculated based on the average stock price of large US industrial companies, while the S&P 500 comprises 500 companies with significant market capitalization.
In addition to those mentioned, there is the NYSE Index, which is calculated by averaging all securities traded on the New York Stock Exchange. This indicator most accurately reflects the current economic situation in the United States.
Important! A rising NYSE index doesn't mean the USD will strengthen against other popular currencies. Quite the opposite, in fact. Stocks are less liquid but more stable investments. Therefore, an upward trend in the NYSE chart stimulates investment activity.
The stock market crash leads to a massive outflow of capital, which is channeled into US government bonds. Currently, this is the most stable asset for preserving capital.
Most experienced investors use US government bonds to diversify their investment portfolios. Warren Buffett formulated the "golden rule" for investors: 70% in stocks and 30% in bonds.
The performance of the NYSE stock index can also be effectively used in forex trading. When trading on margin, proper application of this tactic can allow you to earn up to 300% per annum with relatively moderate risks.
Forex Trading Using NYSE Quotes
To trade, you'll need to study several reversal patterns within the Price Action system. Pay particular attention to the following patterns:
Rails;
Pin bar.
These signals are executed 97% of the time. The "foundation" strategy involves analyzing two price charts:
1. NYSE quotes (available online on specialized services for free and without registration).
2. USD/CAD currency pair chart. The correlation coefficient of this asset with NYSE quotes is -1 due to fundamental factors.
The USD/CAD pair was chosen for trading for a reason. In fact, the dynamics of this chart reflect the current supply/demand level for the US dollar. The investment attractiveness of the Canadian economy is significantly lower than the demand for US government assets.
For analysis, the chart period should be set to D1, as market noise is virtually absent on longer timeframes. To make a trading decision, wait for a reversal pattern to form.
The image shows a D1 chart of the NYSE index. A completed pin bar is circled in red. The following candle closed upward, confirming the prevailing uptrend.
To open an order in MT4, you must wait until the confirmation candle closes completely.
The example shows the candlestick circled at the base of which a sell order should have been opened. The potential profit is 200-300 pips. It is recommended to use the trailing stop option every 100 pips to move the safety order to breakeven. The stop loss should be set at the nearest local level from the entry point.
To increase profitability, you can use key stock indices from other trading platforms:
• London Stock Exchange – GBP/EUR pair;
• Tokyo Stock Exchange – JPU/NZD or JPY/AUD pair.
Using indicators to confirm the accuracy of a forecast is prohibited. This will lead to late opening of trading positions, which will negatively impact trading.
The "Foundation" strategy can also be used for binary options. The trading rules in this case are similar. It is recommended to work with a broker whose terms allow for early contract settlement and opening trades with expiration periods of 24 hours or more.
You can choose a broker here:
http://time-forex.com/brokery-opcyonov The "Fundamental" strategy's signals are executed with 99% accuracy. This can easily be verified and confirmed for yourself.
The only drawback is the rare occurrence of such significant patterns. With proper capital management, monthly returns will range from 20% to 30%.
