How to create Simple Forex Trading Strategy
January 26, 2011 by Forex Superb
Filed under Indicators, Technical Analysis, Trading Systems
You can find a million trading strategies for FREE surfing all over forex forums and blogs out there. The question is do you understand concept of chosen strategy? Probably not! You can’t understand chosen strategy like trader who is create it. You need to create your own strategy by including all familiar indicators and knowledge.
Now I’m going to show you how to create your strategy quickly.
Let’s say we will create day trading strategy, here is some rules for start:
Main time frame – H1
Pair: EUR/USD
Trading session: UK/US – overlap
Take Profit: 50 pips
Stop Loss: 30 pips
When you set basic rules you need to find trend indicator. Every forex strategy must contain way to detect current trend. I will choose Smoothed Heiken Ashi, it’s easy to use and gives us more helpful info. Second indicator is day open indicator (you can choose trendlines, pivots… too).
Let’s apply our rules on current market.
As you can see last few days we have strong buy trend so we are trying to enter only buy trades.
Rules:
When you detect buy trend you will open position only if candle close above “day open line indicator” (horizontal blue line). Smoothed HA must be red. We trade only UK/US session overlap.
As you can see last few days we have strong buy trend so we are trying to enter only buy trades.
If you look last four days and apply all rules from our strategy you will profit 4×50 pips.
We trade EUR/USD on H1 time frame in UK/US overlap only. After blue candles close above daily open line, if smoothed heiken ashi is green we enter the trade. opposite for sell.
Simple Forex Trading Strategy Tips
Use indicators and technique which is familiar with your trading style, indicators which you understand, try to exercise and test your rules. Try to improve all strategy weakness. Use simple rules, test strategy on demo before you learn how to trade profitable.
Good luck.
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