Forex Strategy That Works Every Time

A Trading Strategy That Works Every Single Time

Why make things complicated when they can be easy? In trading, a lot of people have a trend to overcomplicate unproblematic concepts. Sure, some of the concepts in trading are non the sort of things you would intuitively know. Simply many things actually are fairly easy; you simply have to know what to look for.

Imagine a forex trading strategy where all you need to look at is the price itself, and you need it to fulfill iii uncomplicated criteria. Encounter the 1-2-iii pattern, sometimes also known as the A-B-C pattern.

The 1-ii-three blueprint is indeed one of the simplest chart patterns you can trade, and I'g going to tell you what information technology consists of right now: a low, a higher loftier, and a higher low. That'southward all there is to it! Sounds easy?

Here is an example on the EUR/USD currency pair:

EURUSD Chart Strategy

The carmine circles on the chart represent point i, ii, and 3, respectively. The first thing you lot may have noticed here is that we used a line chart to stand for the cost instead of the candlestick charts we typically employ in trading. Virtually charting software packages have the selection of choosing between many unlike nautical chart types, and so you can easily switch between these 2 representations. A line chart just makes it easier to spot the one-2-3 blueprint considering nosotros remove then much of the clutter on our chart. In this case, you will want to keep your chart as clean equally possible so you can focus on what's important.

The idea of the 1-two-3 strategy is that you enter yous buy gild later signal 3, just as the toll passes through the toll level from signal two, equally indicated by the ruby horizontal line.

The terminate-loss will usually be placed but below point 3, and the target price can be determined in a few different means depending on your ain preference. Some utilize Fibonacci extensions, while others look for the next natural resistance level. The optimal choice here is beyond the scope of this postal service, just I encourage y'all to try to find a target price dominion you experience comfortable with.

The logic behind why the 1-2-3 blueprint works is really 1 of the nigh basic concepts in technical analysis and the art of reading charts. If you recollect how an uptrend is defined, y'all are already on the right rail.

An uptrend is defined as a series of higher highs and higher lows in a wave-like pattern. A one-2-3 pattern is, hold on(!), a low, followed by a high, followed by a higher low. Information technology is, in other words, it's the beginning of a new uptrend on the nautical chart.

And then there you take it, the 1-2-3 blueprint. Information technology is one of the simplest, yet about powerful patterns in traditional "cost action" trading. Different traders will have different opinions on where exactly the best place to enter, place a stop, or place a target is, so I encourage yous to go over your charts and do some visual backtesting for yourself on what works best for y'all.

Happy trading!