Saturday, April 11, 2009

How I Trade Forex

My Trading Steps (FOREX)
I outline my trading steps for one, to help me to follow the steps every time I trade forex and two, to share my steps with others. If you have any comment, please feel free to give.

Step 1. Determine the daily trend using Stochastic (14,3,3). If the stochastic is up, I will look for opportunity to long (buy) only.

Step 2. Wait for the 4 hourly chart to hit over sold area of Stochastic (14,3,3) and go long (following daily stochastic direction) when the price rebound from the over sold area. OR Whenever Stochastic (4 hourly) closes over (fast line closes above slow line) becoming bullish pattern.

Step 3. Place Stop loss at 5 to 10 pips below recent low when long and above recent high when short.

Step 4. Limit Losses: The maximum that I can loss for any single trade is 2% of my total deposit, for example, $100 for deposit of $5000.

Step 5: Take Profit: a) when prices hit the 4-hourly Stochastic over bought area when long or over sold area when short. b) when prices hit higher low in the up trend or when prices hit lower high during the down trend.

1 comment:

  1. Hi ABEL,

    I like to play CABLE. My strategy is using Wiliiam %R. I do look at 4hr, 15min & 5min for entry.