This e-book aims to outline a simple method of using daily charts to profit from forex . Why daily charts ? Using the dailies allows the trader to work trading into his daily routine , being able to assess every opportunity but stopping the charts from taking over his life . In short , a tradable system for people living in the real world .
MAKING A TRADE:
So let’s look at making our first trade.The rule we set for entry are very simple.We look for for when the RSI crosses its moving average .Making a trade is on . We BUY when RSI crosses the moving average from below ( green box and line ) and SELL when it crosses from above ( blue box and line ) . It is vital to note that a cross is only validated after the daily candle has closed . We don’t take a trade on the day when the cross has the cross has formed as it may disappear later in the day . We enter the trade as soon as the new candle is formed i.e.at the opening price .
Stop losses are vital if we are to protect our capital and live to trade another day.So where do we put them ? At which point do we think “OK , I was wrong , this trade is dead , forget it and move on .”? There are a few options to look at. One, and a powerful one which has provided very effective for me, is using a percentage of the ATR (Average True Range). The ATR shows numerically how volatile a currency has been recently. A small ATR (30-50 pips) shows the daily ranges have been small, this currency pair is moving little.