by sacha tarkovsky
In this article wee will give you a simple system that you can use to make big profits, even if you have never traded currencies before.
It's simple to understand, easy to apply and because you will understand the logic you will have confidence to trade it with discipline. So here is a simple route to bigger FOREX profits
1. look at the weekly charts
Many people simply look at the daily charts but the weekly gives you the big picture and the big currency trends, which we all want to catch, as these are the ones that can pile up huge profits.
2. Compare the weekly and daily
Look for daily and weekly support and resistance to coincide.
These will represent significant points that if broken will have good odds of the trend continuing once the support or resistance is broken.
3. Forget buy low sell high
The above statement is one of the biggest myths of currency trading as you are trying to predict what may happen.
With this system you will wait for confirmation and only trade when the break is confirmed.
4. Understand this concept
The way to make money is to "buy high and sell higher" What you will do is look for a break to occur.
Let's say it's a break of resistance to trade in anticipation wait for a clear break of the highs and then trade.
It's a fact that most of the major FOREX trends start from a break of new highs and this is the beauty of a breakout system.
5. Understand trader psychology
Most traders can't do this as it feels uncomfortable but it's the only way to make big FOREX profits.
They want to wait for the pullback to get in at a lower level, but of course this does not occur and they sit their frustrated at what might have been.
You on the other hand will understand that you may miss the first bit of the move but there is plenty more to come and that means you will make big FOREX profits regardless.
6. Watch the stochastic
If you don't know what the above is then you need to, so see our other articles or look on the net it's the most powerful indicator to time your entry with and to see how strong the breakout is
When prices break look for stochastic crossovers with bullish divergence.
You can't beat this article for timing so look at it closely
6. Bollinger bands
This is another great tool to use as a filter if a breakout occurs and allows you to pick value areas where you can bank partial profits, or add existing positions.
7. Stops
Breakouts confirm very quickly.
Let the break ride for a day and then place a stop or stop close, below the breakout point.
If momentum fails and stochastics are weak, exit the market on the same day at market.
What you need to do
There is not enough room here to explain everything, but essentially all you need to do is operate this system and it's very simple
Look for basic support and resistance and use both daily and weekly charts.
Accept the logic of trading the breakout and use the stochastic to time and the Bollinger band as an additional filter.
If you trade breakouts and look for significant breaks, you will catch the major moves and big FOREX Profits.
About the Author
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader as well as info about legendary trader W D Gann who made a a 50 million fortune trading go to our website for more trading systems visit our website at http://www.net-planet.org/index.html
