Three Step Trading Plan – forex for beginners

First Step: Select the Pair

When you determine a currency pair to trade, you should always try to find such pair which is in very strong’ trend’ at that time. That is the exact way to take benefit of the momentum’s direction that a market provides to a currency pair. I have concluded that ‘Strong & Weak’ analysis helps
You zero in the top probability pair more quickly.

When the ‘Strong & Weak’ analysis gets completed, you have had lists of three strongest & the weakest currency pairs at that time. The strongest currency pair moves up than other currencies, and the weakest currency pair moves down than other currencies.

For doing ‘Strong & Weak ‘ analysis you take three strongest currencies like, JPY, AUD and NZD and three weakest currencies CHF, EUR and GBP. At the base of this information you will start pairing those currencies up. You would check the first chart of CHFJPY, because the CHF is the weakest whereas, the JPY is the strongest.

Second Step: Check the Charts

You should check 3 charts time frames to read the currency pair movement, after you check your three time frames, for four and one hour daily. You can observe the market is taking this currency pair to lower, lower highs, or lower lows and price action, less than ‘200 SMA’.

Since the CHF is the weakest, whereas, the JPY is the strongest, you would see this trend continue.

It might change with the market’s current conditions buy, great chance is that down trend would continue. You take the short position, in case the price breaks previous low level, below a black line onto the chart. Your stop must be placed on top of the previous level.

Third Step: Place an Entry Order

When you identify your higher probability currency pair as well as the highest probability point for entering the trade, now exact time to place your ‘Entry Order’.

For placing ‘Entry Order’ you perform ‘right click ‘at any place onto the chart. You should make sure about the following things on the chart window: 1. ‘Correct currency pair is present’, 2. Buy/Sell Column ‘Sell option ‘has been selected, 3. Trade Size has been selected, and 4. Trade price has been selected 5. Exit price from the trade has been entered. In the limit box enter the price for closing your trade profitably. Finally click ‘OK’ here you go, your ‘Entry Order’ has placed.

In case the price action gets the price level which you have selected for entering the trade, your ‘Entry Order” would trigger and you would be in your trade with your stop in place.

Other Scenario

Though your selected currency pair CHFJPY is the best currency pair to trade on the base of ‘Strong & Weak’ analysis, it might be possible that when you examine the charts a viable entry might not be present. It is likely that entry may have triggered before. If you don’t find a viable entry on a particular currency pair, you bring up another currency chart on the base of ‘Strong & Weak’ analysis and continue your process. You always select the strongest currency pair against the weakest one. For charts visit FXCM.