A simple Forex Strategy for a beginner in stock trading
At one time, I, like most beginners, used ready-made Forex strategies and could not overcome the break-even
limit and reach at least zero at the end of the month.
Most transactions ended in losses, and the profit on successful ones was so small that it could not cover past losses.
As it turned out, the reason for this situation lies in a purely psychological factor, because according to the theory of probability, the number of unprofitable and profitable transactions should be approximately equal.
But since most profitable transactions are closed prematurely, and some unprofitable ones, on the contrary, later than they should be, the overall financial result leaves much to be desired. Therefore, there was a desire to create a Forex strategy for a beginner.
The Forex strategy for a beginner is based on the use of pending orders, sometimes also called stop or limit orders, depending on the execution option.
It was this approach that allowed me to immediately get out of losses and even make a small profit over the next month of work.
The advantage of this strategy for a beginner is its ease of use and the absence of the need to constantly be behind the screen of the trading terminal. For convenience, you can divide this trading option into several points.
Key points of Forex strategy for a beginner
1. Finding entry points into the market is the most difficult stage; you need to identify on the chart of the currency pair those points after reaching which you are most likely to be able to predict the further behavior of the price.
The most suitable option if there is currently a Forex flat , and the price is moving in a narrow price corridor, the width of which is only a few points.
It is clear that if an important event occurs, the rate will make a sharp jump in one direction or another.
buy stop and sell stop orders , because we do not know where the price will go, at a distance of 15 points from the channel border in this direction. Not forgetting about the stop loss, it should be located approximately where the order of the opposite value is placed. Take profit is set around 20-30 points.
After one of the orders is triggered, the second one can be closed.
The second option for entering the market, which I used, is the important points, everything is also quite simple here.
We find an instrument or wait until the price is at an important mark. In my case, I simply used round exchange rate values of 1.2000 or 0.9500; the more zeros, the stronger the psychological level. The essence of this option is that there are two scenarios for price behavior at these levels: it will either break through it and move on, this is our case, or it will make a reversal in the opposite direction.
Therefore, we place a pending order outside the border of an important level.
For example, there is an upward trend in Forex, at the moment the price is already 1.2985 and approaching 1.3000. This means that we place a pending order at 1.3020 to avoid a false breakout, and a stop loss at 1.2995.
2. Control of transactions is also a rather important point, because you need to find the strength not to interfere with the transaction.
Only pending orders that have not been triggered are closed, since the specified conditions have not been fulfilled. The only thing you can do is to take profit by moving the stop loss and take profit levels on an already profitable trade.
At one time, this Forex strategy for a beginner brought me about 10-15 percent of profit per month. One of the conditions for its use is the guaranteed execution of placed orders, and especially stops, so the broker AMarkets or one of the recommended brokers is best suited for this type of work - https://time-forex.com/reyting-dilingovyh-centrov .