As the sun rises over the market, traders begin their search for the best forex trading system. Each system, is a unique vessel sailing in the sea of exchange rates, promising riches beyond imagination. Some systems appear as shimmering diamonds, dazzling with their promises of quick gains, while others loom like ominous clouds, threatening to capsize even the most experienced trader. The constant ebb and flow of the market create a sense of unease, an underlying tension that hangs over each transaction like a dark cloud. Amidst the chaos, traders must navigate their ships with precision, always vigilant for the sudden storms that can strike without warning. In this never-ending battle of risk and reward, only those with the skill and fortitude to weather the storm will emerge victorious.
Check up on this easy forex trading system: This system uses the trend and goes with it. Each trader has to grasp this rule: “The trend is my friend”. But before that let us check some common FAQs on currency trading.
Forex Trading System Common FAQ
There is no rule that a particular system is best. Actually there can be no holy grail. But yes the success of any system depends on the accuracy. In my opinion, the system must be simple and easy to follow. After adequate backtest if it is seen that the system is delivering good result it can be implemented in live trading. A system trader needs to believe in the system and take all trades generated. In other words, the trader needs to stick to the system and that will ensure his success in the long run.
First, you need to choose a good forex broker. Most of the brokers will give you the MetaTrader or MT4 platform. Next, develop a simple and easy system. Thoroughly backtest the system and do some demo trades. Once you are confident, use the system in live trading. Always trade with a proper stop loss and use good money management.
First, you need to understand whether you will be an intraday trader or a positional trader. If you are an intraday trader, select a smaller time frame on your chart. We suggest you 5-minute to 15-minute time frame chart. In case you are a scalping trader use a 1-minute chart. Now select some simple but effective indicators. Plan your trade entry and exit. The trading rules must be high-probability rules. Backtest the system, and do some demo trading too. Congrats, your forex trading system is now ready.
Trading is never easy for a newcomer. But still, trading is a profession and like all other professions, in forex too you need to be a master to earn consistent earnings. But forex trading has an edge over other trading markets. The currency market is 24 hours open, 5 days a week. So there is no chance of a sudden price gap due to global turmoils. Another big advantage is that forex brokers offer the very high leverage. So a trader can start with a small deposit. Like any other trading platforms, currency trading platforms too, have common indicators. So a trader can also trade forex successfully line any other markets.
Phases of our Forex Trading System
Now let us come to our forex trading system. As we discussed this a high-probability system. This means the entries and exits are done when there is a very high probability of making profits.
Phase 1: MAE
To establish the Trend (I name it The Main Trend), We use two moving average exponentials (MAE). This MAE is known as EMA in simple terms though.
- Firstly, we add an MAE 14
- Secondly, we add an MAE 42
Watch it out, some forex software writes EMA (Exponential Moving Average). An important factor of this forex system: Moving average + exponential.
If MAE 14 > MAE 42, the main Trend is Up. That suggests you need to wait for a long signal. If MAE 14 < MAE 42, the main trend is Down. That suggests you have to wait for a short signal.
Phase 2: RSI
As a Forex indicator, we use RSI or relative strength index which observes the large Trend with extra accuracy. It doesn’t provide many false signals when the price performs a little pullback. Our RSI length is 21 on this forex trading system.
Normally, we use RSI only to find small pullbacks, but sometimes it can help me to find our exit point intraday. We use it like a pre-signal, we’ll see that later.
Phase 3: William’s %R
For us, William’s %R is the King of forex indicators. Therefore, we use it to find the turning point of a pullback. In simple words, William’s %R shows us when the end of a pullback is near. Did you understand that?
William’s %R value is between [-100 ; 0], but for us, when we write we do [0 ; +100]. Why? We don’t know. Maybe we don’t like negative numbers for this system at this point in time.
The Complete Forex Trading System
When William’s %R pulls back to -15 or above, that means our small pullback is nearly dead. And at this moment, we open our eyes, and say to the market: “Show us the money!”. It’s only valuable if the Big Trend is Down.
When William’s %R is less than or equal to -85, and if there is an Up Big Trend, That means the pullback arrived at its end. And we say: “Show us the money!”. In this case, we must have a Long Big Trend. Our William’s %R period is 7 in this system.
Did you see how MAE could help you to find the right direction? RSI showed us the market was Up even if prices did some little pullbacks. And William’s %R showed us the end of the small downtrend. Isn’t this a simple and best forex trading system? For some more great systems check The foreign currency trading section on our site.