The easiest forex trading systems are the simplest. According the renowned professional forex traders, keeping all aspect of your forex transactions simple; from the price movement to the execution of strategies, is one of the single most important things traders can do create winning trades all the time. It might be overlooked, but simplicity is a crucial ingredient to a profiting long term in any financial market.
The truth about the forex market is that it is already complex with so many strategies and trading systems; and a lot of times, traders are confused as to which one to work with. It does not matter what a great review a system got from other traders, there is no one indicator or trading system that can trade the forex market and make consistent profits all the time. If you really want it simple, you should stop looking for a perfect indicator and start reading price action as it is on the price charts.
WHAT A SIMPLE FOREX SYSTEM IS ALL ABOUT?
There are different strategies for different market conditions. Here is an example of the simplest forex system you will ever come across
1. What sort of trading condition are you dealing with? That is the first question to ask. In this system, we are dealing with swing trading, and the trade will be on a daily chart.
2. Use simple moving averages to detect identify new trends as early as possible. The earlier the trends are pointed out, the better.
3. Just the simple moving average may not be enough, so the stochastic is used for confirmation. It determines if it is still alright to go ahead and enter a trade after there is a moving average crossover. Another good thing about using the stochastic at this point is this point is that it helps the trader avid overbought and oversold situations, which are not good for the market.
4. Another thing to look out for at this point is the strength of the trend in question; which is the function of the RSI (Relative Strength Index). It serves as an extra confirmation tool too.
5. Next, determine what you are willing to risk for each trader performed with this system. 100 pips per trade is not a bad idea using this system. The risk level is somewhat correlative with time frames. The higher the time frame, the more pips you should be willing to lose.
6. Finally, define your entry and exit rules, and go ahead to test the system with manual back test.
This is pretty an easy forex system, and a profitable one at that too; only if you will take the time to understand it, and follow the rules as they are.
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