This simple five-step strategy will help you streamline your transactions while achieving consistent profits. Trading strategies can be very successful without having to be too complicated. In fact, over time, simple trading strategies have proven to be more successful than very complex strategies. The reason for this contradiction is that simple strategies are easier to follow and implement.
The five-step strategy is as follows:
1. Use the daily chart to check trends. The graph should tell you whether the market is on an uptrend or a downtrend.
2. After understanding the trend, check the basic news release that may affect your transaction. If there are any major news releases within 2 hours of the transaction, please do not perform any of the following steps. You can get current economic news from selected financial market news sources.
3. If there is no message within 2 hours after the transaction, please execute the trading plan. For example, if the main trend rises, look for a “buy” signal from the technical indicators and vice versa if the main trend declines.
4. This is the most important step, where you decide whether to trade. A common strategy is to use 4 EMA [Exponential Moving Average] and 23 EMA intersections on a 30-minute chart to determine whether to buy or sell. You should use other metrics [such as weekly hub metrics, stochastic metrics, and MACD [mobile average convergence difference]] to confirm your trade. These indicators should also follow trends, not flat. You can further benefit the transaction by trading only during periods of high liquidity and by using the 4-hour chart to confirm trends. If everything looks good, then you are done!
5. The final step in managing your funds is to use one of two ways to position your profit and set the trade with a tight stop loss of around 35 points. The first method is to use a health risk return of at least 1:2. The second method is to use your daily support and resistance.
As you can see, successful trading strategies don't have to be complicated. By simplifying trading strategies, the chances of a successful trade will increase dramatically. This five-step strategy should help you get a consistent profit in your trading.