Monday, March 2, 2009

Forex Strategy

it's been a while since I updated this blog. I've promised on my last post to explain how my forex strategy works. It's simple actually.. FYI, I used marketiva for my forex platform, so I'm not sure how other platform works. Usually, I trade on EUR/USD and use hourly candlestick chart.

Based on what I see, the average movement for EUR/USD is 100 tp 150 pips, meaning the highest point for that day minus the lowest point on that particular day is 100-150 pips but somtimes I can go more than that.So, my target for 1 day is just 100 pips. I know for some of you, 100 pips is quite low, but just imagine, if in 1 week you make 300 pips which is achievable for me. In 1 month, you make approximately 1200 pips. Lets make it 1000 pips only. If 1 pips = USD0.10, 1000 pips will earn you USD100. What if you set your 1 pip = usd1..? 

Now, here is my strategy. Let say on that early week, the average point for EUR/USD is between1.2757 and  and 1.2722. What I do is I'll open 1 long trade(buy) and 1 short(sell). I'll set my price type as 'stop' and will buy at 80-100 pips lower than the average point. On the same time I will sell at 80-100 pips higher than the average point as well. 

Bare i mind, when I buy and sell, the trade will not been executed yet but it will be execute once the chart reach the point that I've set. And dont forget to set you exit target. Usually, I'll set it to exit after 100-120 pips profits. Then, I'll close the platform and will see it again on the next morning :P.

The next morning, I'll check on the position. Most of the time, the position has been executed and closed. But sometimes, it will not execute at all. But I assure you, with this strategy, I gain 400 -1000 pips per week. 

But the important thing is you got to have strong equity. The best way is if you have USD100, you set up your 1 pips to usd0.10 - usd0.20. If you want to gain more, invest more  :)

In this post, as you can see, I tried to make my words and terms as simple as it can be coz, this post is dedicated to beginners in forex.. If you have any question, feel free to leave your question in comment field and I'll get back to you asap



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