This post and video is to go along with the Currency Strength Trading System
Consider this if you will to be Part 2 of my tradings system. In part one I showed how to find strength in currencies.In Part 2. This is where I am going to show you how to trade the currency pair that you have chosen through the strength system.
My system for trading currencies is very simple. I don’t use indicators or bands or anything else. I use price action and S&R levels. Support and Resistance is the most important technique that I have found. I have tried indicator trading and either I was confused about what I was supposed to do or it simply didn’t work. I am not quite sure how I found Support and Resistance trading I just seemed to fall into it. I read a lot of books on trading both Forex and the stock market so I probably read it somewhere and it stuck in my mind.
Added together the currency strength system along with support and resistance gives me a high probability trading strategy. Just like my stock market earnings system, I am using those four words again.
‘High Probably Trading Strategy’
Those four words have a slight disadvantage on other trading strategies because there aren’t usually that many setups per day. However I hate losing trades. I really do, it effects me psychologically so I try to find trades that have a small chance of failure. That is a good thing. If I have one or two winning trades per day then I am happy as a lamb. I am not someone that can watch their trading balance shoot up and down. No no no no! I have tried everything to not let it bother me but when I start to lose I perform badly to make it even worse. So I looked for a system that doesn’t lose very often and along with money management and how I compound my trades I don’t lose a lot of my balance when I do actually lose!
Good right?
The Setup
Using the currency strength system I have found that the GBP because of Brexit and the British Prime Minister losing his court battle is dropping after a high. Also using the same system I have noticed that the USD is strengthening. The GBP is going down and the USD is going up.
On the GBPUSD chart, I have identified a level as you can see the red line is the resistance and the green line is the support. The red line is the top where I will place a Stop Loss the yellow line is my Entry and the green line is my Take Profit/Exit (well probably just above the green line)
Using orders rather than market entry is a lot less risky because if the price doesn’t reach the yellow line then you lose nothing! If however, the price does trigger the entry the possibility is that it will carry on dropping to hit the TP. That is the beauty of entry orders!
As to not over complicate things the trade is a simple 1:1 trade meaning $1 risk for $1 reward. This is my minimum risk to reward allowed in my system. I will write a blog and make a video on my risk to reward and money management system in the future.
I am writing this blog totally blind and I will make a video to go along with this blog! Again I don’t know how this trade will turn out!
Thanks for reading.
The Earnings Trader
Paul Davids
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