10 Forex Strategy (3-Continue)

Currency Trading Strategy Number 22:
Former stock traders take note: I say former because I don't
honestly know why you would ever want to go back to stocks after
having tasted the forex. Don't over-trade the forex. This is not a
scalping market! If you have to scalp, do it in slow motion.
Currencies trend well. Don't buy too soon in a downtrend, and don't
sell too soon in an uptrend. Watch for trendline breakouts to know
when to make your move.

Currency Trading Strategy Number 23:
You cannot succeed at trading the forex unless you are TOTALLY
committed to trading, and trading it. This is not something to be
played with. If you are not going to take it seriously, then try
something else.
Currency Trading Strategy Number 24:
Put your emotions in your hip pocket. This is a business, and should
be treated as such. If you have any bad habits, the forex will fix
them real quick.

Currency Trading Strategy Number 25:
Important point here: If you deem the major trend for the current
session, based on everything you have learned to this point, to be
down, then think DOWN. Sell rallies. Don't look to buy, or you might
get whipsawed to death. Likewise, if you deem the major trend for
the current session to be up, based on everything you have learned
to this point, then think UP. Buy the dips. Don't look to sell. Former
stock traders fall prey to wanting to have it both ways. Maybe, when
you get real good at this, you can try. But for now, think one way,
and save yourself the grief.

Currency Trading Strategy Number 26:
Another important point here: The major rally for the Euro begins
after two am New York time. These are the London hours – the
busiest in the forex, bar none. The Euro always – session after
session – puts in, on average, 76 pips during the first 12 hours from
that time forward. Whether you want to believe it or not, the Euro,
once it makes up its mind what the major trend is going to be during
those 12 hours, will "drive" to the other end of its range (76 pips)
within those 12 hours. So catch the trend, and ride it. Now, it won't
be a straight line, of course. Even an airplane taking off or landing
encounters some bumps along the way. Same too with the Euro.
Once it picks its direction, it will meander all the way to the other
end of its range. This will "fake" the dumb money out. They never
know what happens to them. To conclude: If the Euro wants to have
a down trend during those 12 hours, it will achieve its 76 pips south
of where it started. So, think DOWN. If the Euro wants to have an up
trend from during those 12 hours, it will achieve its 76 pips north of
where it started. So, think UP. The Euro either goes up or down
during those 12 hours – not both. Here, I am talking about the major
trend, of course. Ah yes, there will be rallies or dips along the way,
depending on the direction of the trend (down or up), but like I said
earlier, SELL THE RALLIES IN A DOWNTREND, AND BUY THE DIPS IN
AN UPTREND. That's all there is to it.

Currency Trading Strategy Number 27:
Something to think about: If you get the above strategy - number
26, then you're going to love this one. It will test your nerve. If you
buy into the idea of the major trend unfolding during those 12 hours
(check it out here every day, and you'll see living proof), then why
not try to get in when it starts to unfold, and "ride it." That will take
nerves of steel, because the Euro will go against you from time to
time – but not enough so to take out your initial stop. From a
risk/reward ratio point of view, you are risking 20 pips to gain 76.
Not a bad ratio. What I am trying to say here is why not just put
your trade on, set the stop, and go clean the swimming pool while
the Euro meanders its way to the end of its range. What spooks a lot
of people out is when they stare at price action after they have
engaged their trade, and they over-react every time the Euro
hiccups. Just leave it alone. So, what's the worst that can happen?
You can get stopped out right? Chances are you won't. If you catch
the major trend, chances are very much in your favor that you will
be richer by at least US$760 per lot. If you trade the action all the
way through the trend, you may get beat up real bad, and lose
anyway. Let the Euro lead you, not the other way around.

Currency Trading Strategy Number 28:
Every once in a while, I would encourage you to step back from the
daily intraday action, and have a look at it from 30,000 feet.
Sometimes, we can get too close to it, and not see the trees in the
forest. On the daily chart, if you plot trendlines and look for
divergences, you will learn a lot about where price is going to go
"next." Of course, that's what we all want to know, right? Not only do
trendline breakouts and MACD divergences tell a "big" story, but
where a daily bar closes will offer up a clue as to where price will
likely go in the next session. Study the chart, and you'll see what I
mean.
For those of you who don't know what this is all about, the little line
pointing off to the right of a price bar is the "close" for the daily
session. The little line pointing off to the left is the "open" for that
session. In the forex world, the close of one session automatically
becomes the open for the next session, as this is a very liquid
market, and there are no gaps in trading.
I just thought it wise to pause and reflect at a higher level from time
to time. Looking at things top-down is sometimes healthy, and a
wise thing to do. We can sometimes get caught up in the minutiae of
the daily flurry of price movements, and lose perspective of the
bigger picture unfolding above us.

Currency Trading Strategy Number 29:
To reiterate, there are just a "few" things you have to watch out for,
and be "patient" for set-ups to occur. Don't just pull the trigger
because you "think" it's time to do so. Wait for bona fide "signals."
There are only "four" clues you have to look for: "reading bars,"
MACD divergence, pivot point breakthroughs/tests/violations, and
trendline breakouts. That's it folks. That's all it takes to succeed in
this wonderful business called forex trading. No other bells and
whistles or toys are required, contrary to what you may have learned
before. The hardest part for you will be to "unlearn" everything you
knew about trading before. Just give your head a shake, and it will
go away.

Currency Trading Strategy Number 30:
Although I have said that there are only four clues that you have to
look at for price direction – "bar reading," MACD divergence, pivot
points, and trendlines – there is actually a fifth. It's called "price."
Price is the number one indicator in the sky. It will tell you where it
wants to go. Let it point the way. It's like playing cards. Wait for it to
reveal its "hand." You just have to be patient and wait. It's called
"following the leader."

Currency Trading Strategy Number 31:
I was asked recently about multiple lots – in other words, buying or
selling more than one lot at a time. You can either "load up the boat"
at your entry point, or you can go at it one at a time – adding
additional lot(s), as price moves through each successive pivot point,
as it "reaches" for the end of its range. If you are confident that you
are "with the trend," and are using good money management
techniques, then there is nothing wrong with taking more position(s)
along the way. Or, you can do both – load up to begin with, and
buy/sell more, as price progresses through pivot points in its tear to
the finish line. Don't bail too soon. Remember, currencies trend well
(especially the major trend), and price knows where it wants to go.
Let it take you there. Use the "five" indicators – "reading bars,"
MACD divergence, pivot points, "price," and trendlines – to make
your trading decisions.