Welcome to this trading tutorial on a Forex Trade strategy that works so well that I trade this every time it sets up to this day. I’ve been trading this for years and this darned thing just continues to work. See the 10 minute video below for the full tutorial.
Here is the most successful forex trading strategy I’ve found. By the way this also works on stocks as many as futures. Pretty much anything you can chart. Let’s introduce a couple of general concepts to set up the trade, why it works and the logic behind it.
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FOREX TRADE STRATEGY THAT WORKS
It’s generally accepted and I will be the first to acknowledge that there are many variations within this but generally acknowledged in the trading community that there are two types of dynamics in the market:
- Trend trading.
- Reversion to the mean trading.
Within trend trading we can include such things as low volatility breakouts that are starting a new trend trend reversals or a type of trend trade even though there were versal trade.
Reversion to the mean trades are among the best Forex trade strategy that works because they aren’t quite as well spread throughout the trading community and that’s what this one is. This is a reversion to the mean tape trade and I like these kind of trades they’re not typically as big of a reward to risk ratio but the win loss ratio on that can be very very high.
THE BEST FOREX STRATEGY EVER
If you like scalping, this may be the best Forex strategy ever. It can be a great way of making some money while you’re waiting for trends to set up. Some people say that the market’s only trend 20 percent of the time.
This green line here is the 50 simple moving average. And it’s very important that with this type of trading you use the simple moving average and not an exponential moving average or any type of moving average. That’s one thing that kind of blows people’s minds especially beginners they think well wait a minute I don’t want the slower moving average or I want a faster one because the faster moving average will follow trend and price action more closely.
SIMPLE FOREX TRADING STRATEGIES
So counter-intuitive to a lot of people. Most people think you need something complicated to be successful at trading Forex. But most profitable traders I know actually use very simple Forex trading strategies.
I always use a combination of a lagging and leading indicator and that’s part of my strategy. I use the two in combination together. The 50 SMA we use as our intermediate to trend indication. Prices above the 50 period simple moving average.That’s the kind of thing we expect in a trend.
FOREX STRATEGIES THAT ACTUALLY WORK
It’ll wiggle a little bit but basically going sideways price action goes sideways. This is one type of cycle in the market by the way. Most people think of cycles of being low high low low and that is one type of cycle that’s the oscillation type of cycle. But there are actually many types of cycles. And one of them is the trending and non trending cycles. Markets go three times were the trend. And then they go through times where they are not trending. So that’s some other type of cycle. Right. So that’s fine then. We continue to go out. Let me show you a reversion to the mean type of example.
So now we get back into a trending market with SMA going up. Prices going up higher or highest higher lows. All that great. That’s what we expect. Come back down now. Here is what we’re looking at. This is a reversion to the mean type of pattern so now all we have is wait a minute the 50 SMA I mean here’s the basic structure it’s a price structure type of trade in.
This is one of the forex strategies that actually work.
FOREX TRADING STRATEGIES FOR BEGINNERS
We had a few extra details to it but here’s the general structure of it. I love this trade for its simplicity, which also makes it one of the best Forex trading strategies for beginners.
Now we get something different instead of praise continuing to go up as the 50 period simple moving average is going up. We actually have price go down below the 50 period simple moving average for the first time and it goes down pretty hard. So it’s below the 50 period simple moving average. But guess what? The the 50 period simple moving average does not move down. It continues moving up and that’s the structure that is the key structure to this Forex trade strategy that works.
MOST SUCCESSFUL FOREX TRADING STRATEGY
So this is a basically what’s happening here is a high volatility move to the downside in a short period of time. So we could create a rectangle with that that’s what we normally do. But this is the structure as you see. This is not the norm. But it is perhaps the most successful Forex trading strategy that I’ve come across.
FOREX STRATEGIES RESOURCES
One of the Forex strategies resources you’ll likely want to use is a scanner, and you can scan for these trades pretty easily. Just set up a scan that says you know price bars whether you want the open high open low close all that stuff. The entire bar has to be well below the 50 period simple moving average.
Then you just put into the scan prices below the 50 amain and the 50 SMA is angling up. In other words know the close of today is greater than the close of one day ago two days ago three days ago something like that to have the angle of the 50 period simple moving average angling up.
FOREX STRATEGIES REVEALED
Whatever scanner you use can help you find these Forex trading strategies revealed in their results.
These trades set up a lot or all the time but frankly most of the best trades in the world are the ones that don’t set up that often. They’re a bit of an anomaly and these seem counter-intuitive. And that’s ironically what makes them actually work. Because a lot of people aren’t going to trade that they don’t get it. They don’t understand the philosophy the mathematics behind it and the traits that most people take are the ones that don’t work. They’re professionals and understand you know an anomaly like this is something that gives you an opportunity that most retailers are now going to take.
GET MY FREE MARKET ENTRY TIMING INDICATOR
BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at Barry@TopDogTrading.com, and I’ll show you how to get access to that indicator.
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