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The forex market is a strange, nasty beast, so it is no wonder a majority of new traders start their trading journey with losses and bust accounts. Statistically, very few traders are truly profitable, when compared to the whole bunch. Many traders come into the forex market looking for quick gains and huge profits, this eventually leads to high leverage trading and subsequent losses. The big question is how to trade the forex market consistently and still remain profitable.
This is a question I have tried to answer with my June 2019 strategy. The first thing to consider when tackling this question is the nature of the forex market. The forex market is a trendy market. This means that most of the time, it moves in a particular direction. It is either continuously going up, or continuously going down.
This is a weekly chart showing how trendy the EURUSD market actually is.
This is something many retail traders forget during trading. My strategy trades on the EURUSD market using the two indicators; the Relative Strength Index (RSI) and the Commodity Channel Index (CCI) indicator. Both indicators are used on the 5-minutes chart of the EURUSD. The Commodity Channel Index indicator is used to determine the market trend, while the RSI indicator is used to determine the trend momentum and pick the best entry points.
The CCI indicator uses a time value of 2400; once it is above zero the strategy considers the market trend to be bullish and will be ready to open long positions. The value of 2400 on the 5-minute represents the 200 Moving Average on a one-hour chart. When the price is above the Moving Average, this represents the CCI indicator being above zero.
The long positions will only be triggered if the RSI indicator is above 60. The RSI indicator tracks market momentum, so a value above 60 shows that the market trend is strongly bullish.
In the same way, the strategy will open short positions when the CCI indicator is below zero and the RSI indicator is pointing down and below 40. For all the trades, the target profit is 10 pips, while the stop loss is 250 pips, with a trading volume of 5M. The stop loss is unusually large because the strategy is a self-adjusting one. Once it detects a trend change, it closes the open position and starts to trade in the new trend direction.
The saying that “what goes up must come down” is very true for the law of gravity, but the same thing does not apply to the forex market. The forex markets can pick a direction and trend in said direction for weeks or months, without any noticeable reversal. The thought that we can predict the direction of the market is what often leads to wrong trading decisions. Rather than try to predict market direction, the best approach is to look for the current trend and go with it. If you can’t beat them, then join them. That is a saying that is more appropriate to trading the forex markets. With the “Novem” strategy, the strategy will continue to trade in a trend direction, until it determines a trend change using both the RSI and CCI indicator.
This is a question I have tried to answer with my June 2019 strategy. The first thing to consider when tackling this question is the nature of the forex market. The forex market is a trendy market. This means that most of the time, it moves in a particular direction. It is either continuously going up, or continuously going down.
This is a weekly chart showing how trendy the EURUSD market actually is.
This is something many retail traders forget during trading. My strategy trades on the EURUSD market using the two indicators; the Relative Strength Index (RSI) and the Commodity Channel Index (CCI) indicator. Both indicators are used on the 5-minutes chart of the EURUSD. The Commodity Channel Index indicator is used to determine the market trend, while the RSI indicator is used to determine the trend momentum and pick the best entry points.
The CCI indicator uses a time value of 2400; once it is above zero the strategy considers the market trend to be bullish and will be ready to open long positions. The value of 2400 on the 5-minute represents the 200 Moving Average on a one-hour chart. When the price is above the Moving Average, this represents the CCI indicator being above zero.
The long positions will only be triggered if the RSI indicator is above 60. The RSI indicator tracks market momentum, so a value above 60 shows that the market trend is strongly bullish.
In the same way, the strategy will open short positions when the CCI indicator is below zero and the RSI indicator is pointing down and below 40. For all the trades, the target profit is 10 pips, while the stop loss is 250 pips, with a trading volume of 5M. The stop loss is unusually large because the strategy is a self-adjusting one. Once it detects a trend change, it closes the open position and starts to trade in the new trend direction.
The saying that “what goes up must come down” is very true for the law of gravity, but the same thing does not apply to the forex market. The forex markets can pick a direction and trend in said direction for weeks or months, without any noticeable reversal. The thought that we can predict the direction of the market is what often leads to wrong trading decisions. Rather than try to predict market direction, the best approach is to look for the current trend and go with it. If you can’t beat them, then join them. That is a saying that is more appropriate to trading the forex markets. With the “Novem” strategy, the strategy will continue to trade in a trend direction, until it determines a trend change using both the RSI and CCI indicator.