I want to show you an example of a simple profitable Forex trading strategy that appears on my website. The trading system is called the Daily Chart Swing Trading System and all it requires is an understanding of Fibonacci retracements and the Stochastic oscillator (5,3,3 settings).
Why Is It A Simple Trading Strategy?
The more simple you can make your trading strategy (less moving parts) often times the better it performs. Simple can actually mean a robust trading system (hopefully profitable as well) which can handle many market conditions.
You may be one of those traders who uses so many different trading indicators (often telling you the same thing) and is still looking to be consistent. First thing is to know what your indicators do and get rid of the ones that really are not helping you.
This simple system only has a few moving parts to it and if you don’t know them, they are pretty simple to learn.
- Do you know how to use Fibonacci? Good.
- Do you know how to use Stochastics and the overbought/oversold areas? Good
- Do you know some price acting strategies you can use to enter a trade? Good
5 Month Swing Trade and 1400 Pips
This swing trade set up back at the beginning of 2016 and lasted until it hit the profit target in May 2016. The profit target was actually the support zone from back in 2014!!
simple profitable forex trading strategy
This is the daily chart of the USDJPY Forex pair. After price had a nice bull run, price began to put in the price pattern of lower highs and lower lows which we know equals a downtrend in price.
Since it’s a downtrend, we were looking to take a short in the market following the rules of the Daily Chart Swing Trade System.
- Marks the beginning of the Fib pull
- Is the where we ended the pull of the Fib tool
- This is the zone of the 61.8% retracement level and right below that in the red box is our overbought Stochastic.
- After a strong thrust into our Fib zone, price put in an inside bar/spinning top candlestick. The trade is shorting the lows.
- This is our ultimate profit target as a previous support zone from 2 year previous
You will obviously be managing your trade while it is in progress and may have been stopped out depending on how tight your stop placement is. Many Forex traders use too tight a stop because they want a larger position size. This is wrong!
Simple, Profitable, And A Great Swing Trading System
I will say this is a simple trading system but the it’s not easy. Not every trade will be a strong winner and the key is whether you can bounce back after a loss. You can see though that it can be profitable and you should test it out to see if it suits you.
Since many traders like to use indicators (usually the wrong way) for their trading method, Netpicks has put together a free and vital “Indicator Blueprint” to put you on the right track when using an indicator for your trading decision.
Get access to the PDF and videos by clicking here.
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