Hello all, I hope you are having a great summer! Summer is a time for enjoying the outdoors as much as possible, which I have also been trying to take full advantage of before another winter sets in. But now that we are getting closer to fall time, and getting closer to increased volatility in the forex markets as summer comes to end, my attention is turning back to forex trading again.
I just wanted to write a little today about what I believe makes a profitable forex trading plan. Like most things in life I truly believe that the more simple you can keep your trading plan the more profitable you will be. I think we all have this instinctive idea in our minds, either consciously or subconsciously, that a forex trading plan needs to be complex in order to be profitable. However, I personally believe the opposite to be true. In my humble opinion the more you can simplify your approach to trading the more success you will find.
In this blog post I am going to intentionally over simplify things but I plan to get into more detail in my posts to follow.
If you have been following my blog for any length of time you will know that I am a strong believer in trading with clean charts on the higher time frames. What do I mean by clean charts? I mean using very few, if any, indicators, and relying on price alone for clues as to what a particular currency pair may do next.
By saying that I rely on price, what I mean is that I am primarily looking at support and resistance levels, and what price is doing at those levels. As price approaches these historic support and resistance levels we should be getting ready to observe the valuable clues that the market is offering.
Price can really only do one of three things once it reaches a key support or resistance level: 1) break through and keep on going, 2) reject the level and reverse in the opposite direction, or 3) stall or consolidate at that level for some time before moving in either direction.
In my next post I will discuss a little more about the type of candle pattern formations that often occur at these key support and resistance levels, and if carefully observed will provide high probability trading opportunities.
Have a great day and stay tuned for the next post!
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