All traders want one thing – to earn a lot of money.
To achieve this goal, they chase interest rates, trades, and focus on the “right” tools:
- Someone opens trades only with a 1-to-3 risk/reward ratio
- Someone opens 10 trades a day
- And someone spends 3 hours a day looking for the “right” stocks
All of these strategies work. Each approach has its own strengths and weaknesses. But their main disadvantage is that they are all very time-consuming.
Today we will take a look at a strategy that takes less time and can generate as much profit as you like (yes, we’re not kidding).
If you feel that trading takes up too much of your time and you don’t get the desired results, this article is for you.
So, what is this “magic” trading strategy like?
- We open 1 trade a day (just one? yes!)
- We risk 1% of the deposit per day (too little?)
- We do not check the trade after opening it
- We are looking for an entry point on five currency pairs at most
This set of rules will allow us to:
- Optimize the time we mindlessly spend looking at the chart
- Risk less and prevent the desire to win back your losses
- It will save us from the anxiety you get every time you check an open trade
Now, to the most important part – the strategy itself.
Multiple time frame analysis
Multiple time frame analysis was invented to ensure that a trader could enter a trade as early as possible and, as a result, earn more when the trend is reversing.
We’ll be analyzing the chart from a daily to 5/15 minute time frame.
Daily time frame
Find a swing on the daily time frame and plot a line from it. In our example, we work with the USD/JPY chart. So, we find a swing in an uptrend, which will be acting as support for the price in the future:
Then we move on to the 4-hour chart, or you can immediately proceed to the hourly chart. We study how the price behaves when it touches the support area:
We can see that when the price first touches this barrier, it slightly falls below the area. This usually happens when there is a strong downward momentum (a sharp drop before entering the zone).
During the second touch, the downward momentum is still strong, but the price fails to move as low as the first time, which means that the upside potential gets stronger.
During the third and the fourth test of the area, the price rises even higher until it finally skyrockets.
So, what have we done here:
● We found a support area on the daily chart
● Measured the strength of the downward (selling) momentum
● Measured the strength of the upward (buying) momentum
Then, we concluded that the price would rise. And our expectations turned out to be correct.
Trend and candlestick analysis
Now, we’re switching to the 5/15 minute time frame to find the optimal entry point and reduce risk.
Candles and trend during the first touch
A pin bar or “hammer” is formed in the support area in classical technical analysis. The candlestick has a long lower shadow and a small body.
The candlestick also acts as an “engulfing” and overlaps the bodies of the three previous candles:
What can we say about the trend? On the chart above, we can observe a continuous downward momentum without any pullbacks, which is likely to run out of steam and will probably fail to break through the support area on the first attempt.
Second and third contact
The second contact is similar to the first one: the price rushed into the area, a pin bar appeared, and a reversal up began.
The third contact is different from the first two:
- The price slowed down and started moving sideways
- The price slowed down slightly before testing the area
Potentially, all entries would pay off with substantial profit:
It’s worth noting that we don’t need the entire price movement. Our risk is 1%, remember? So, we take our profits at 2%.
Stop loss in all trades should be set with a margin, don’t set it too close to the entry candle.
Let’s sum up what we did:
- We studied the trend on a 15-minute time frame, supplementing our multiple time frame analysis
- We examined candles and found entry points
- We determined where to set a stop-loss
As a result, we have a ready-to-use FX strategy.
How to use the strategy
It’s all pretty simple:
- Just follow the tips that we shared in this article
- Supplement or modify them to suit your understanding of the market
- Trade in the direction of the trend on the daily chart (see screenshot 1, in all examples, the uptrend is observed)
Make it your goal to find one such trade every day. When you learn how to filter trades and set a wide stop loss, you will reduce your risk to a minimum and your profit could reach up to 40% (one trade a day, 20 trades a month).
In the article, we have looked at the example of how you can earn + 40% a month with super-conservative trading and only 1% risk.
Our strategy is simple and effective. It’ll take up to 30 minutes a day.
Are you ready to dedicate a few days/couple of weeks of your time to training and start earning + 120% per quarter and + 450% per year? Then open a demo account and start practicing now.
After 2-4 weeks of trading on a demo, switch to a live account and start making real money like a professional trader.
Remember: your transaction risk should be no more than 1%, but you can take more profit.
We wish you successful and effective trading!
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