Forex Trading Strategy Using Price Action - forex trading computer

Forex Trading Strategy Using Price Action ~ forex trading computer

NickB’s Price Action Strategy

Welcome to the latest edition of the NickB trading Method (also known as NickB’s Price Action Strategy).

My Forex Trading Strategy revolves around the principles of price action analysis. This page explains my Forex strategy in more detail, so you can understand it and trade it successfully too.

Keeping Your Trading Simple

The key principle of my Price Action Strategy is to keep things simple. I am against over complicating trading. In my opinion, the simpler your method is, the more effective you will be.

With my Price Action trading strategy I aim to keep my charts as clean as possible. In fact, the only thing I place on my Candlestick charts are a few Support and Resistance lines. My method is based around reading and understanding price by reading Candlesticks and using Support and Resistance lines. This means my method is very simple to use and relatively stress free. Here’s a picture showing you my EUR/USD 1hr chart.

I find that this is the best Forex strategy as the chart is clear and easy to understand and there is little to no noise distracting you from the price. This is one of the benefits of using aForex system like this.

Some trading strategies are an absolute mess of indicators. This is not best Forex strategy as it is overly complicated and confusing.

Why would you want to trade like this?

Indicators Required for this Trading Strategy

So to trade my Forex Trading Strategy I use no indicators.

I generally don’t like using Forex indicators, as I find the data worthless, as they lag current price. If you want to be in the moment and take trades based on what’s happening right now then you have to base trades on current Price Action.

Which Currency Pairs can you Trade Successfully using Forex Price Action?

My Forex Trading Strategy will work on any currency pair, which is free floating and regularly traded.

This is because my method is based on Price Action. This means you can use this trading strategy to successfully trade any currency pair you find on your Forex trading platform.

That being said, I personally prefer to concentrate on just a few currency pairs at any one time. I find it too distracting to try and keep track of too many pairs at once.

I mainly trade the EUR/USD, USD/CAD and AUD/USD. I generally trade these currency pairs as they are the most predictable and their movement is smoother. You don’t find random jumps unless there’s been some highly unexpected news, which is pretty rare.

If you prefer to trade a particular Forex session such as the London, New York and Asian session then choose the main currency pairs that are active at those times.

Price Action Trading Works Better on Longer Time Frames

Since this Forex Trading System is based on Price Action you can trade any time frame from one hour and above.

I mainly concentrate on the one hour, four hour and daily charts. These are consistently the most profitable, as the patterns are easier to spot and lead to more consistent profits.

Types of Price Action Analysis

Primarily, I use two forms of Price Action Analysis:

1. Support and Resistance lines.
2. Candlestick analysis.

How to Enter Trades using My Forex Trading Strategy

Due to the recent economic uncertainty and countries losing their credit ratings etc, currencies aren’t trading as they normally would. This has led to me to trade reversals exclusively.

I look for strong reversal setups forming on top of my Support and Resistance areas. Once a pattern forms, that indicates a reversal, I set up a trigger price and enter the trade. I take several trades each week and average at least an 80% win rate.

Trading Strategy Targets and Stops

Targets: I aim for roughly 30 – 50 pips per trade.
Stops: I place my stop loss 15 – 30 pips away from entry.

These targets and stops differ during different market conditions so please check the bottom of the Taking Trades section for the most up to date information.

How to Adjust the Trading Strategy Around News Releases

I use the Forex Calendar from ForexFactory to keep track of Economic data, which is due to be released on the pairs I trade.

If there’s any high impact (red/orange) news due to be released for the American Dollar, the Euro, the Canadian Dollar, or the Australian Dollar, then I stay out of the Forex Market. I do not want to enter a trade 30 minutes preceding the news, or after the news.

As you can see, my Forex Trading Strategy is straightforward and will allow you to make pips in any market conditions, with almost any Forex currency pair.

source  http://www.forex4noobs.com/forex-trading-strategy/

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