Simple Forex System Trading

Found another breakout system that based on one bar in a 4 hour chart.  The author uses this method to trade GBP/JPY.  Looks like the result is not bad at all.

So basically, in a 4 hour chart:

• Take the high and low of the second bar of the day. (GMT)
• Calculate number of pips between the high and the low.  (High - Low = Channel; e.g. 160.00 - 158.50 = 1.50 –> 150 pips)
• If channel is more than 200 pips, no trade for the day.
• If channel is less than 200 pips, place buy 10 pips above the high & sell 10 pips below the low.
• Take Profit = buy order + channel (e.g. Buy @ 160.10, channel = 150 pips, Take Profit = 160.10 + 1.5 = 161.60)
• Stop Loss = buy order - channel (e.g. Buy @ 160.10, channel = 150 pips, Stop Loss = 160.10 - 1.5 = 158.60  )

Read more about this strategy @ forexfactory

Found this very nice article on how to use MACD in the daily Forex trading.  Particularly, I love the MACD divergence & convergence strategies sections.  Personally, I like to use Awesome Oscillator divergence on the one-hour chart to trade Forex but many traders prefer MACD.

Read the MACD trading strategy article @ forexoma

Found this simple strategy on forexta, so I thought I’d share here.

Why does someone else’s system not work so well for others?  Because a system suits its developer’s personality, style, and skill set.  There is no one size fits all trading system.

Read more on babypips.com.  The article is absolutely well written.  

This is not a breakout system but looks fairly easy to set up.  It does not require you to glue to the screen.

Here is a system I have been testing since the beginning of the month. I am 3000+ pips and still running strong. I like this system because you only need to trade once a day (I trade w/IBFX so @ 00:00GMT). I trade most of the pairs (all majors & crosses) offered through them.  Here are the details.

Originally appeared on babypips.com

I came across this discussion on the Oanda board today about someone’s margin call experience.  Somewhere in the thread, someone mentioned that always use a stop loss and never use the margin call as the stop loss.  I couldn’t agree more.  Don’t let each trade lose more than 2% or 3% of your total investment capital.  Strict money management is king to the successful Forex trading.

This is not a set and forget method, but it is a well documented breakout system using candlestick patterns as well as support and resistance levels.  You can find all the details about this strategy on forex4noobs.com

Thanks everyone for your kind comments.  I am so glad to hear from you.  I had a spam filter put on the site to filter out spammers’ comments.  Your comments were waiting for me to verify but I somehow overlooked.  I apologized for the delay in responding.

I don’t normally trade British Pound in my daily trading; however, I do have demo accounts set up for a few Pound / Dollar breakout systems.  Over time, what I found was that the pivot breakout systems produce better results than simple breakout systems.  Now, I am using Oanda demo to test, so I do not use trailing stops.  The results are based on very simple set-up with protective stop loss and preset take-profit target.  Stop loss also plays a very important piece in the trading system.  I found that somewhere between 25 and 35 pips of stop loss produced better results in conjunction with the take-profit targets.  The ratio is about 1 to 1.  For example, stop loss 25 pips v.s. take-profit 30 pips, or stop loss 30 pips v.s. take-profit 30 pips.  Not that I meant to change the authors’ original systems, but I was just curious as to what combinations of profit/loss ratio would change the end results.

Again, I invite you to check out these two breakout systems if you are a British Pound / Dollar fan, because I think the creators are brilliant.