I have recently been to a seminar on how to trade the forex markets. This is to help me create the income to compliment the capital gains I make from investing in gold (which has averaged over 40% compound over the last 11 years…go gold!).
for the last three weeks I have been floundering around trying to make sense of what I was taught in the very expensive forex seminar I attended. Then last Thursday I had the big breakthrough I needed in understanding the charts and the system. So I will pass it on to you here.
contrary to the popular image of forex trading being for screen jockeys, it seems the big money is made is to be made working from the daily charts. Ensignal (the charting software) gives you about 25 currency pairs to trade and at any given time half of these are in a confirmed trend. This simply means the 200 day exponential moving average(ema) has a slope. Next, the 50 day ema should be tracking along above or below it, depending on whether you are tracking a downtrend or an uptrend.
The currency will move along below or above the 50 day ema but every now and then come back to touch the 50day ema. This is the sweet spot to trade. After it has confirmed it is moving once again away from the 50 day ema it is time to enter for a 3-6 day trade of some 100-300 pips. These sweet spots only occur about once a month, but since you have 25 currency pairs to choose from then you will have about ten really good trade set ups a month. Maybe someday this might come in handy for you.