Okay, so you are now a forex trader, perhaps a beginner one. You want to get profit from forex trading as soon as possible, and - of course - as big as possible. Can it be done? How to get profit (especially the BIG one) in forex trading?
Well, my friend, that is the one-million question (or perhaps, ONE BILLION QUESTION).
No one have the these EXACT formula(s), trick(s), or strategies(s). There is no such thing as ALWAYS GET PROFIT in forex trading. In my years of experiences in this "battle-field", I lost money several times, few of them are BIG MONEY, but in the other hand I also get a lot of money from forex trading. If I deduct all of my profit earned with the loses I suffered, I still have more money on my bank account than before. So, I consider myself as a good player in forex.
I will try to share my strategies in forex trading. Please be noted that NO SUCH THING as 100% accurate, so you must tune the strategies or tricks with your own experiences in order to maximize its potential.
Now, in forex, there are two things you should consider: technical analysis and fundamental analysis. Technical analysis in more to statistical and past historical data analysis, while fundamental analysis is more to future analysis, to me. Combine this two and you will increase your change to get profit in forex trading. I will explain both as simple as possible.
For technical analysis, I usually do a simple charting analysis to help me take decision. For your information, there are a lot of chart models, such as Line Chart and Chandle-Stick Chart, and the analysis are also a lot, such as MA (Moving Average), RSI, Stochastic, and many others. In different articles I will describe these analysis. Most trader use many chart combinations and - of course - many chart analysis, but personally I only use 1 chart and 1 analysis. Yes, as simple as that. Is this mean the other trader are doing something wrong? No. Of course not. They are a very thorough traders. I will confuse myself if I do what they do. That is the reason why I take a simple approach in my trading.
One thing that you should know is my trading period. I as wrote in different article, I always do DAILY TRADING. I open and close my position in the same day. I never-never let my positions open overnight. Please read my other article to see the reason for doing this. Therefore, every tricks and strategies that I use and explain here are already tuned for short-term trading. If you use different period, such as medium-term or long-term, than perhaps you can share your strategies with us here.
OK, so, what is the chart and analysis I use? Simple: Line Chart and Stochastic Analysis. Sometimes I use Chandle-Stick chart to help me take my decision, but most of the time, I only use Line Chart and Stochastic Analysis.
This is a line chart of EURUSD. As you can see, line chart exposes a easy-to-read price history of a currency pair, in this case is EURUSD. Now, you can start extrapolating this chart to predict the next movement of the currency. See the pattern, feel the movement, and start predicting where it will "move".
"Wait, Stop. Hey, are you saying we should become a psychic?", you might protest! Well, I can understand your protest, but I havent finished yet! So, sit tight and relax. Now, where we I? Ah yes. After you predicting the price movement, don't take action yet. Don't open your position, either long (BUY) or short (SELL). Open your forex platform (I use Meta Trader, and believe me, this is a good forex platform) and see the analysis: STOCHASTIC.
This is the complete chart set that I usually use to make decision in forex trading. See the bottom chart? That is the stochastic analysis. It shows an important signal here: OVERBOUGHT or OVERSOLD. When the stochastic chart is below a minimum threshold, say 20, it means the currency pair is oversold. In this case, EURUSD has oversold indication because the stochastic indicator is on 16. What is this means? IT MEANS, TIME TO BUY, my friend! The price is considered too low so the price MIGHT move up, bounce back.
(to be continued...)
