Lots of my friends that have tried to trade forex and failed say to me, "come on tell me your secret". I always tell them that there is really no secret it is just a matter of finding a system that works for you. In this article I am going to uncover the so called secrets that I use to take money out of the forex market on a daily basis.
There are two types of trading that are used to make money on the forex market and the secret for maximum profits and limited risk is to merge the two methods together. The first method is a simple day trading method using a 5 minute chart with 3 EMA's. The largest EMA is set to nbr 60, then one at 20 and one at 10. With this day trading system we are looking for the crossover of the 20 and 10 EMA as an indicator to enter the trade, this shows a change in trend. We must take into consideration previous price action when entering this type of trade by entering either above or below the previous days support or resistance. The 60 EMA used on this chart is to indicate the main trend and it is always best to try and enter the trend with the 60 EMA heading in the same direction especially for this next uncovered secret.
The second method of trading that is used is the same set up as the first but the charts are set at 4 hours. Once you have the crossover of the 20 and the 10 EMA's you then need both of them to cross over the 60 EMA. For a buy trend they will be above the 60 and for a sell trend they will be below the 60 EMA. If you are using this chart set up without the day trading set up then again it is important to look for previous support or resistance on the previous 4 hour candle.
Now this is the important bit and how to put the two charts together for the real uncovered secrets. The first thing to do is check your 4 hour chart set up to see if it is trending then make a note of the price of the previous support or resistance. Enter a trade using the 5 minute chart set up preferably in the same direction to what the 4 hour chart is trending. Once you come close to the support or resistance level that you have noted down take out 80% of your profits and move your stop loss up to your entry point. You now have locked in 80% of your profits and cannot lose. Let the 20% continue to run and build up a 100 pip stop loss I have seen these types of trades run on for over 500 pips. That is my uncovered secret to making money on the forex markets.