Best Forex Tactics To Achieve Consistency In Forex Trading
I am going to discuss some of the most profound ideas in forex trading. If you are subscribed to my newsletter you probably remember what I think about forex market. I see it completely different than most of the traders and analysts. There is a reason for that. It is extremely fast market so ‘natural’ analysis tools are hard to use. Big part of moves have no value and can only make things harder to analyse.
The trick is to find a method that is in some way counter intuitive. There is something that I call ‘chart core’. I mean by this ‘real value’ of what is shown on the chart. Because when you look at the forex chart itself you will notice that due to the large and dynamic moves regular price chart gives no good indication. Especially if we rely on high/low price.
Have you ever had situation when you were sure that market already broke above/below some level and few moments later everything reversed? Or maybe price broke your resistance level but when it came to formation of close price it occurred that price went back below that level?
Please look at picture from my wesbite. It shows classic trend lines. If market breaks those lines we have a signal sell which tells us when position should be closed. Of course position does not have to be closed but this signal tells us that current trend may be over. In many cases it is true but also in many cases this kind of signals give us no advantage.
Can you see when market breaks those lines? If we had position opened in that directions those signals could give us some gains. But not much. This is because of the characteristics of forex market which is very fast and dynamic.
Method which you can see on my website is very popular on stocks or futures market. You will often find that analysts try to ‘squeeze in’ another lines which create even bigger angle. This way they try to catch the top/bottom even earlier. Often it brings good results but also it results in leaving market too early or entering it too early.
So is there a way to do it better?
Look at the same picture from my website. It is exactly the same chart. This time we added here RSI indicator. Not many know that but indicators are great for drawing lines and some of technical analysis patterns. RSI is one of the best possible tools for it.
To previously seen trend lines on the chart we added similar lines to the RSI indicator. As you can see this often resulted in earlier signals. Yellow area shows us distance between signal generated by indicator and signal generated by price chart.
Can you imagine how often this gave us advantage over classic method? Of course it does not work as good every time and in every time frame. But the rule of thumb is that often RSI indicator will show us signals a bit earlier. This can be used also in your trading strategy. You can incorporate it and use not only to close position but also to open it earlier.
If you want to learn more about best forex tactics visit my site where you will be able to learn most profound informatoin on forex trading. People from my free coaching list should already be familiar with it.
Sylwester May is a forex trader, coach and introducing broker. The New Forex Model is his most famous book which covers latest knowledge on forex trading. Visit: www.thenewforexmodel.com
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