Forex – The Proven Profit Strategy
After trading the Forex market for years it’s been a journey coming up with a solid method and system to trade the Forex market consistently and take profits from the market day in and day out. It’s no secret; it’s just a matter of discipline and a working system with a set of rules.
After years of trading there are two major reasons people may fail, the first being they don’t have the correct stop loss ratio in place and second, they simply cannot identify the correct time frame to trade on due to work schedules and just life in general.
First decide on how often you want to trade, every minute once an hour, once a day, or even once a week. This will vary based on your own individual schedule. Some traders sit at their computer staring at their monitors for hours waiting for a trade, if this isn’t you then decide to trade once per day where you only have to check market conditions every 4-6 hours, once in the morning and maybe once in the evening.
The most crucial aspect of trading is using a profitable system. For to take a very conservative approach, use a 6:1 win to loss ratio. Meaning, you only have to win a trade one time out of six to break even. That means you only have to be right about your trade 20% of the time to be a winning trader. Even if you are right just 16 percent of the time that’s break even given a 6:1 win to loss ratio. Simply put if your stop is set to 20 pips, your take profit should be 120 pips. You can adjust the ratios and scales accordingly to your time frame. I find that 20 pip stop and 120 pip take profit works well on 1 hour time frames.
If any of this is too much, there are automated trading systems out there. Some people frown on them, but as an experienced trader there are some true goldmines and systems that yield great results. Be sure to do your due diligence when looking at any system and make sufficient back testing and forward testing has been done before you decide to take the dive on any given automated trading system.
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