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"The essence of strategy is choosing what not to do.” —Michael Porter
“Persistence is what makes the impossible possible, the possible likely, and the likely definite” —Robert Half
As in every business you will be forced to make decisions day in and day out. These decisions and choices you make will determine your long-term growth, viability and your ability to reach your goals. The same applies to Forex trading. You will have to make a decision when to open a position and when to exit the trade. You have a huge number of pairs to trade and in time you will expand your trading activities to other markets such as commodities, options, CFDs. However it is vital to understand that you cannot trade all the time. Opportunities arise frequently and not every single moment. You have to be patient and wait for the precise moment when all the criteria set by your strategy are fulfilled. It is only then that you have the highest probability of winning the trade. Patience will not kill your business or make you a profit. But trading when there is no reason to trade will certainly leave you with a loss.
I think that the most essential element of trading is to know when to exit the trade and when to cut your losses. Forex trading is a vehicle of investment that can in the long term provide you with a nice online income but it is crucial to understand that you cannot win all the time. Only through persistence and consistency you will reach your personal financial freedom. Forex trading is about having more winning trades than trades with a loss. You will have a loss for sure, it is unavoidable - and you have to accept it! But if in the process you win 6 trades and lose 5 then you are in profit. That is why it is important to have a strategy with success rate of more than 50%. Because if you do that over a sustained period of time, you will notice that your bank account is growing. However, it is important to understand that you cannot cut your losses whenever you find it appropriate. Leaving a trade with a loss running can eliminate a month's accumulated profit or in some times even your entire bank account. You must get accustomed to closing the trade with a Loss as easily as closing the trade with a Profit. Both are equally important - although a Loss always has a more negative impact on your psychology.
"However beautiful the strategy, you should occasionally look at the results.” —Sir Winston Churchill
Throughout the years I have experimented with a vast number of strategies. Each one has their own advantages and disadvantages and some worked best for me and some did not. There is no such thing as the best strategy in the world. As long as the chosen strategy works for you and you make money online and you build your business online, then it is probably the best for you. It is essential though that you adopt one that matches your personal lifestyle and personality. I have adopted 1 Basic Core Strategy and 4 additional side staregies that work for me and which provide me with profit almost every day.
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Basic Core Strategy - Personal Money Maker (PMM). This is really my favourite stategy, one that gives me consistent profit and which has the greatest success rate of all. It does not require constant monitoring, it is easy to apply and follow, allows me to make money overnight. This one however will be given to people who decide to become part of my team when you start trading with any of my registered brokers: XM, easyMarkets, FXTM, and LMFX (US residents).
2. The Simple Crossover (SC). This is a very simple strategy which does not require a lot of time and it is a pleasure for traders with a busy lifestyle. Strategy requirements: Time frame: 1 Day Indicators: 5 EMA, 12 EMA, RSI 21 Currency : Any
Entry rules: Buy when 5 EMA crosses up and over 12 EMA and RSI is above 50. Sell when 5 EMA crosses down and below 12 EMA and RSI is below 50.
Exit rules: Exit when 5 and 12 EMA cross again or when RSI crosses again back through 50.
3. The Advanced EMA Crossovers (AEC). An advanced version of the previous strategy which adds extra
confirmation and has the potential for great profit.
Strategy requirements: Time frame: 1 Day Indicators: 5 EMA, 12 EMA, 21 EMA, RSI 21 Currency : Any
Entry rules: Buy when 5 EMA goes through 12 EMA and continues through the 21 EMA. BUY or SELL in the direction
of 5 EMA once the price gets through the 21 EMA. The probability for potential profit increases when the RSI goes
below 50 when Selling or above 50 when Buying.
Exit rules: Exit when 5 EMA goes back and touches 12 EMA.
4. The Increased Momentum (IM). A strategy that combines multiple indicators so as to provide high probability signals
for good entries.
Strategy requirements: Time frame: Any Indicators: 5 EMA,12 EMA, Stochastic (14,3,3), RSI (14,70,30) Currency : Any
Entry rules to BUY: Buy when 5 EMA goes above 12 EMA and the Stochastic lines are heading up and Stochastic is not in an overbought position (above 80 level) and RSI is above 50.
Entry rules to sell: Sell when 5 EMA crosses below 12 EMA and the Stochastic lines are heading down and Stochastic
is not in an oversold position (below 20 level) and RSI is below 50.
Exit rules: Exit when 5 EMA crosses 12 EMA in the opposite direction or if RSI crosses again back through 50.
5. The Spring Trading Strategy (STS). A strategy that is used to identify new good entries that can lead to a new trend.
Strategy requirements: Time frame: Daily Indicators: 150 SMA, Stochastic (6,3,3) with levels 70 & 30, RSI (3,80,20) Currency : Any
Entry rules to BUY: When the price is above 150 SMA, then wait for the RSI to cross below 20 level. Then focus on the
Stochastic: once the lines crossover occurs below 30 (Must be below 30)- then buy when the price bar has closed.
Entry rules to sell: When the price is below 150 SMA, then wait for the RSI to go above the 80 level. Then focus on the
Stochastic: once the lines crossover occurs above 70 (Must be below 70)- then sell when the price bar has closed.
CAUTION:
1) All the conditions for a SELL/BUY must be met for you to take the trade.
2) The PROTECTIVE STOP LOSS is always placed when you enter the trade and is adjusted to the most recent swing
High or Low
Exit rules: Exit the trade when the Stochastic reaches 70 for the Uptrend or reaches 30 for the Downtrend.
EUR/USD 1 Day
GBP/USD 4 Hrs
USD/CHF 1 Day
USD/JPY 1 Day
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