as a major reason why most beginner Forex traders fail is due to their being encouraged to trade on shorter time framesit is best for beginners to stick to using daily charts and perhaps using 4 hour or hourly charts at the same time to find more precise, lower-risk trade entries
We can use this momentum property to see that when prices are breaking to new long-term highs or lows, we have an edge on our side which we can use to profit. What is this strategy based upon? Looking back over historical data from the summer of 2001 until March 2020, we can see that If you apply this position sizing strategy, it means that if you have $2,000 in your account, you should risk $5 on the trade. Divide this amount by the stop loss you are going to use: in the example below it is 50 pips, so there you would know to size the trade so you are risking 10 cents per pip .Tighter stop losses tend to ensure greater overall profitability although they also lower the win percentage.
, but as you will be moving stop losses to break even after 2 days, you will not have more than two trades at risk at the same time in the same currency pair., which should be between 5 and 8 days after entering the trade,once the price has reached a floating profit at least double the risk Judging the price movement yourself to trigger your own trade exit signal is very challenging for most peopleI mentioned that it is possible to trade this strategy on a shorter time frame than the daily chart. I recommend that beginners start with the daily chart and stick to it, but more experienced traders can drop down to the 4 hour or even hourly chart once the daily chart has given a trade entry signal to try to find a more precise entry.
. This strategy recommends identifying trade opportunities on the weekly time frame and using the 4 hourly or hourly chart to identify an entry signal, which I explained above. It can also be possible to use a daily chart here to find the entry signal. The second step is to find a currency pair which has been moving sideways for the past 50 days on relativelyThe way to find a currency pair which has been going sideways for the past 50 days is to pull up a daily price chart and use the horizontal line tool to draw horizontal lines at the highest and lowest points of the last 50 days of candlesticks. Alternatively, you can use the Donchian Channel indicator set to 50 days.