BASIC FOREX TRADING COURSE --- Lesson 7

THE FOREX TRADING STRATEGY

OK. Now you know how to use the Indicators on the Charts and what signals they provide. I will now show you a Strategy which will make you money whenever you get the signals. In order to avoid False Signals I am going to combine all the Indicators you have just learnt, on the same chart. This will strengthen and confirm the Signals we will get to Buy or Sell.

Look at the Chart below:

I have placed 3 different coloured lines on the chart, the Cyan coloured line is on the Moving Average crossovers, the Pink coloured line is on the MACD and the Light Green ones are on the RSI.

The Moving Average crossover has provided us with a signal to Sell but its not really strong enough, we wait for the other indicators to provide us a confirming signal.

Next we get signal from MACD crossovers (Pink Line) to Sell, we can enter the Market Short here but we wait for further confirmation from RSI.

A little later we get the Signal from RSI too (Light Green Line). The Green RSI Line crosses the Black Mid Point and goes below the 50 level, confirming and giving us a Sell Signal.

When all the 3 Indicators have given us Signals together, we enter the Market Short. We Sell Short. We are in the Market now. This is shown in the chart as trade A.

We stay in the Market until we get the signal from MACD telling us to get ready to get out of the Market, Reverse or Buy. Of course we are looking to exit the Market with a Profit.

We wait for confirmation from the other Indicators. Next we get signals from both RSI and Moving Average crossovers together. The RSI cuts and crosses the Mid Point 50 from below and Fast Moving Average crosses the Slow Moving Average from below telling us that its about time we should exit the Market. This is shown on the chart as B.

We Sold at 1.2870 and we Bought at 1.2820 making a Profit of 50 pips which is $500.00

Next we get another signal at C first from the Moving average crossovers, then from MACD and finally from RSI. When we get confirmation from all the 3 indicators we Sell Short again. We Sell Short at 1.8459.

The Market went down upto 1.8343 and has now moved up to 1.8354. You will notice that the Histogram has started weakening and the MACD is just about to give us a Signal to get out of the Market, other Indicators have not given us any signal yet. We shall wait for the confirmation before we Exit the Market.

Suppose we Exit at the present price of 1.8354, we shall make a profit of 105 pips which is $1050.00 profit. The Forex Broker charges 3 to 4 pips as their brokerage so if you subtract $80.00 from the 2 trades you made today you made Profit of $1470.00

Thats all Folks! You got the Goldmine now. Start digging.

When you get enough experience in Forex trading then I would like you to have a look at my other Strategies, specially "Trading The Forex News". This is highly Profitable and Easy to Trade.

At the end I have one request to make. As I have helped you learn Forex Trading and earn a Decent Income please help your Friends and Family members by distributing this course to them freely or charge them a nominal fee. I want everyone to Prosper and lead a Happy Life!