Powerful laws to win with the strategy Long Term.

Powerful laws to win with the strategy: Long Term. Forex strategy

Rediscovering the basics

If you're a trader with significant experience, you've probably experienced what I am to tell you, if you're a beginner, sometime in your life of trader you will happen: the desire to improve every day our performance as a trader and our consistent profits in the Forex market, leads us to investigate and test new techniques, special strategies, combinations of graphics and more complicated indicators; leading in some cases to get lost within a sea of technicalities such that, at the end, we don't even remember how it managed to win, sometimes even more, with 2 or 3 basic concepts that we driving when we started.

Many of us have gone through this situation more than once. Some have decided that the trading was not for them, others, perhaps like you, that they were losing the North and the passion they had when they started and therefore decided to return to the basics, where everything was easier and maybe even win more.

Today I would like to remind you of those basic, I want to remind you the easiest way to make money in trading, the method that every beginner should be applied when he began his career in the Forex market: our "old friend", the technique Long Term.

Who has just begun?

All have been there, none of us (race traders) "was born learned", as my grandmother used to say. In the same way, all face the fears and doubts of Beginner:

"I don't understand anything about finances! I'm not made for this!"

"It is a risky activity! “There are that have nerves of steel to make trading!"

"I'd like, but I don't have the time to devote to trading!"

"I know that it is something that I am passionate about; that my family and friends tell me I cannot devote to Forex, because it would lose everything as in a lottery!"

Am I wrong or before it went any of these ideas through your mind. If you're a beginner may still have it. Don't worry, if you're willing to learn enough to dedicate yourself professionally to the trading, have good money (Money Management) management and control your emotions to an extent, can calmly make trading and earn more money than you will lose.

Let me tell you that this is the key; there is no crystal ball that will tell you exactly what to do to win always. On the other hand, often lose money in this famous market Forex, because no technology is foolproof. The secret is to make more money than you lose.

The good news is that today you will know the basic rules that you must follow to use the technique Long Term with a 70% success or long term. 

First law: Dedicated only 5 minutes a day

If you're a beginner, it is likely to have a primary occupation which you occupied all day. Possibly you have decided to invest some of your savings in the trading, seeing the "depressing" bank interest rates.

This technique requires only a few minutes a day to review the daily graphs (1-d) or four hours (4 H), finally, graphics of large periods of time. You don't have to spend all day behind the movement of an action or a bonus. You simply take a look when you return from work, it can be, and make your decisions based on the movement of the day.

If you think about it, this technique is ideal for a beginner, you commit not few mistakes all day in front of a computer, you're thinking if you should buy or sell.

Second law: It defines the trend

First thing you should do a trader who chooses to apply Long Term technique in the Forex market is to observe the movement of prices on the market, to set the trend in which price moves with the greatest possible safety.

How do I do it? If I suspect that it is a bullish trend, stroke a line that touches the minimum that has touched the price during the rise of the price. This line should point upwards; in this case we are in the presence of an uptrend.

Conversely, a tendency to lower, or bass, I suspect that the price falls and the line would be draw playing the maximum prices that has "drawn" the price while I was down. If the line points straight down, we have found a downward trend.

One way of helping us understand the direction of a trend, is with the use of a moving average of 21 periods (21 EMA). If the sails are above the moving average is an uptrend. If they are below, it is then a downtrend.

This graph has been mapped an ascending line touching the minimum requirements (points indicated) that price played in its upward movement. This line represents the tendency, in this case, bullish.

Third law: He expects a setback

"Everything that comes up, need to get off". "Any trend must breathe." We could define as well recoil, let me explain better: If you see the graphics of any financial instrument, you will notice that the price never moves in a straight line, on the other hand, draws a sort of waves, rise and lower setting minimum and maximum.

When price goes up, for example, in a bullish trend, "take breaks" to "breathe". I.e., at certain points, the price reverses slight and momentarily, in this case down, then return to your address, the main upward trend. This is a kick.

Here the problem is recognizing it is a kick or a reversal of trend, thing that could "lie us strategy".

In this case, it more advisable is requesting the help of the good Fibonacci. This indicator is optimum to establish the progression of a trend, indicating us if the recoil of the price in a trend bullish or bearish exceeds certain percentages; in that case, we could be in the presence of an investment.

The graph, which represents an upward trend, has identified the moments in which the price has moved in reverse to the main trend direction. These corrections of the price are called kicks, and are normal in the movement of the price of any instrument financial.

Fourth law: It identifies the signal and enters

Everything is ready. If you've identified the trend and saw that the reverse occurred, now only you can expect the start signal to enter with your position.

Now that price was a setback, the trend should return to your main course. You should take advantage of this new movement of the price. But when?, how to identify if the price will continue its trend?

Here come into play various theories, I'll only give you one of the safest; one that it has brought us Forex totaled the most positions with profit in the Forex market. You cannot always cause this signal, but for us, when this candle is draws it is as when in the 100-meter starting firing is heard.

I'm talking about famous call (drawn in a candlestick chart) sailing: PIN BAR or Hammer (hammer, because of its shape).

In an uptrend, the PIN BAR will be drawn with the body (the head) to top and the nose (the longest line) down. It will obviously be contrary in a downtrend.

This is your start signal to place your orders on the Forex market.

In a candlestick chart, are "drawn" different types of candles, depending on the price of entry and closing, as well as the highest and the lowest. In this case a candle Pin Bar of a bullish trend is highlighted. He is characterized by a formation similar to a hammer, this is also known as "hammer". In the Pin Bar, the "body" is located in one end of sailing, having this "body" as no more than 1/3 the size of the entire sail. It usually indicates the end of the "kick" and the continuation of the primary trend.

Fifth law: It protects your orders

A mistake many beginners make is to believe that everything is already done. Nothing further from the truth. If we do not place backorders position output could easily lose a very good entry or even turn it into a huge loss. Therefore, that is of vital importance to protect entries with a STOP LOSS and TAKE PROFIT.

If I open a LONG position, i.e., buy; immediately after purchasing I place STOP LOSS below the BAR PIN which it was drawn.

Then I fixed my TAKE PROFIT at the same relative distance, above my entry. For example, if my STOP LOSS 100 pips put it below the price of entry, TAKE PROFIT will place it 100 pips above the entry price.

However, it is possible to place not only TAKE PROFIT, but it could be two or more, thus increasing our risk/benefit (Risk Reward) to 1:2 or 1:3.

This benefit will further increase when the price has reached the first TAKE PROFIT, because at that time I can level my STOP LOSS up to the price of entry (ENTRY). Now my operation will be zero risk.

This graph indicates how ideally should be provided after entry into a position pending orders, then that has been created a Pin Bar. The blue dotted line indicates the entrance, the Red the position of Stop Loss and Take Profit area green.

Conclusions

Possibly this is not one so picturesque strategy for traders who love the adrenaline in the Forex market, but it is, without a doubt, a winning strategy, which has shown an average of 70% of earnings.

Another advantage that is worth considering is the fact of working with graphics daily or 4 hours, finally, graphics with Time Frame so long, makes the market, news, rumors not influencing prices, producing wrong signals.

If you are a novice trader or if you want to go back to basics and enjoy peace of mind while you make trading and earn money, I advise you to try this technique. You can devote part of your capital to this strategy, if you want to try other routes, but not discard, and above all, remember to respect the "powerful laws of the Long Term".

REFERENCE: http://profesionforex.com/mercado-forex-5-santas-leyes-long-term/