PROFX Simple Effective Forex Trading Strategy Using Heiken Ashi and MACD Crossover

PROFX Trading System (Simple Effective Forex Trading Strategy) – BEFORE WE START WITH THE EXPLAINATION FROM THE STRATEGY RULES, PLEASE TAKE THE TIME AND READ THE GENERAL TRADING RULES.

 

TRADING PLAN

 

MANY TRADERS STARTS TRADING WITHOUT ANY PLAN. SOUNDS UNBELIEVABLE BUT IS UNFORTANLY THE TRUTH.

 

PLAN:
  • WHERE YOU WANT TO ENTER A TRADE ?
  • HOW MUCH MONEY YOU ARE GOING TO RISK ?
  • WHERE YOU ARE GOIUNG TO GET OUT IF YOU ARE WRONG ?
  • WHERE YOU ARE GOING TO TAKE PROFITS IF YOU ARE RIGHT ?
  • KNOW HOW MUCH MONEY YOU ARE GOING TO MAKE IF YOU ARE RIGHT ?
  • NEVER TRADE WITHOUT A PROTECTIVE STOPLOSS !

RULE: DONT TRADE WITHOUT A TRADE PLAN !

 

MONEY MANAGEMENT

 

CREATE FIXED RULES HOW MUCH MONEY YOU WANT TO RISK PER TRADE AND STICK TO YOUR RULES. DONT USE A RISK FROM MORE THEN 5% PER TRADE !

RULE: USE MONEYMANAGEMENT !

 

PROTECTIVE STOP LOSS

ALWAYS PLACE A STOPLOSS WITH THE INITIAL ORDER. NO MENTAL STOPS..! MANY TRADERS SAY: „I USE MENTAL STOPS“ AND CHANGE THEM MENTAL WHEN THE MARKET GOES AGAINST THEM.

WITH A MENTAL STOP, AS SOON AS THE MARKET HAS GONE THROUGH YOUR STOP LOSS PRICE, YOU WILL NO LONGER ACT ABSOLUTELY RATIONAL. NOW, YOU ARE MOST LIKELY TO MAKE A DECISION BASED ON FEAR, GREED AND HOPE.

RULE: NEVER TRADE WITHOUT A FIXED PROTECTIVE STOP !

 

TAKING LITTLE PROFITS AND LETTING YOUR LOSSES RUN

A MAJOR MISTAKE FROM TRADERS IS TAKING SMALL PROFITS AND LETTING LOSSES RUN. RESULT FROM HAVING NO TRADE PLAN.

AFTER ONE OR TWO LOSING TRADES, YOU ARE LIKELY TO TAKE SMALL PROFITS ON THE NEXT TRADE EVEN THOUGH THAT TRADE COULD TURNED INTO A LARGE WINNER.

RULE: CUT LOSSES AND LET WINNER RUN !

 

AVERAGING UP/DOWN

IN FOREX WITH A LEVERAGE FROM 100:1 OR GREATER, AVERAGING A LOSS CAN BE DISASTROUS FOR YOUR ACCOUNT.

A TYPICAL APPROACH IS THAT AFTER YOU WENT LONG AND THE PRICE DROPS DOWN; YOU MIGHT FIGURE THAT IT WAS A GOOD BUY THEN, IT IS A BETTER NOW.

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YOU MAY JUSTIFY AVERAGING DOWN BY FIGURING YOU WILL HAVE A LOWER AVERAGE PRICE AND REQUIRE A SMALLER MOVE TO BREAK EVEN. UNFORTANLY, YOU WILL LOSE TWICE AS MUCH IF THE MARKET CONTINUES AGAINST YOU.

RULE: NO AVERAGING UP AND DOWN !

 

OVER TRADING

TO MUCH OPEN TRADES WITH TO MUCH RISK IS A CLASSICAL EXAMPLE FROM OVERTRADING. OUR RULE IS TO HAVE ONLY 3 POSITIONS (MAX) OPEN AT ONE TIME. THIS GREATLY LIMITS ANY POSSIBLE OVER TRADING.

NOTE: OVERTRADING IS THE QUICKEST WAY TO BLOW UP YOUR ACCOUNT.

RULE: NO OVERTRADING !

 

NOT HAVING PATIENCE

YOU TRADE TO MAKE MONEY, RIGHT ? YOU DONT GET MONEY TO ENTER AS MUCH TRADES AS POSSIBLE. CHOOSE THE BEST TRADING SETUPS AND WAIT PATIENT WHILE THEY COME UP.
IST SOMETIMES BETTER NOT TO TRADE THEN TO TRADE AND LOSING MONEY.

RULE: BE PATIENT !

 

DISCIPLINE

IT HAS BEEN OUR EXPIERENCE IN TRADING FOREX AND HELPING NEW AND SEASONED TRADERS, THAT THE GREATEST CAUSE OF LOSSES IS THE ABSENCE OF SELF DISCIPLINE. TRADER NEED A LOT OF SELF DISCIPLINE !

THE BEST WAY TO TRAIN YOUR DISCIPLINE IS MAKE YOURSELF WATCH THE MARKET FOR A WHOLE WEEK WITHOUT DOING ONE TRADE. EVEN IF THE PERFECT TRADE COMES UP DONT DO ANYTHING. THIS WILL PROVE YOURSELF THAT YOU HAVE DISCIPLINE TO BE PATIENT AND NOT TO TRADE.

RULE: BE DISCIPLINED!

 

PROFX TRADING STRATEGY RULES

 

BASIC RULES FOR ENTRY

 

  • 1) THE BASICRULE IS THAT ALL INDICATORS MUST POINT IN THE SAME DIRECTION AND YOUARE IN THE TRADING TIME. (EUROPEAN-USA SESSION)

NOTE: YOU CAN ALSO TRADE THE ASIA SESSION, BUT COUNT THAT THIS SESSION IS SLOW AND GOOD MOVES HAPPENDS NOT SO OFTEN.

 

 

  • 2) CHECK MAINTREND FROM THE 4 HOUR CHART. TRADE WITH THE MAINTREND.
  • 3) CHECK THE ECONOMIC CALENDER. DONT ENTER A TRADE BEFORE MAJOR NEWS COMES OUT. (GDP, NFP ETC.)
  • 4) DONT TRADE HOLIDAY SESSIONS.
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BASIC RULES FOR PLACING THE PROTECTIVE STOP LOSS

 

 

  • 1) PLACE THE STOPLOSS NEAR THE LAST IMPORTEND SUPPORT/RESISTANCE LEVEL. (25—70 PIPS)
  • 2) ALWAYS PLACE THE STOP WITH THE INITIAL ORDER.
  • 3) DONT USE MENTAL STOPS
  • 4) NEVER USE A STOP GREATER THEN 100 PIPS

NOTE: IF YOU FEEL NOT COMFORTABLE WITH SUPPORT AND RESITANCE LEVELS, YOU CAN USE ALTERNATIVE FIBS, PIVOTS AS POTENTIAL STOPLOSS LEVELS.

 

BASIC RULES FOR EXIT

 

  • 1 ) EXIT @ TAKEP ROFIT: 100 PIPS FOR GBP/USD
  • 2 ) EXIT THE TRADE WHEN THE SIGNAL CHANGE
  • 3 ) EXIT THE TRADE WHEN STRONG NEWS COMES OUT AND YOU HAVE NOT ONE IDEA WHAT WILL BE THE DIRECTION AFTER THE RELEASE
  • 4) EXIT THE TRADE AT THE END OF THE US SESSION

 

RECOMMANDATION: TRADE THE STRATEGY 1-4 WEEKS ON DEMO BEFORE YOU START TO TRADE LIVE WITH THE STRATEGY.

ADVANCED STRATEGY RULES: WHEN YOU HAVE ALREADY EXPERIENCE IN TRADING FOREX, USE THIS RULES TO INCREASE YOUR WINNING TRADES AND YOUR PROFITS.

 

ENTRY ON THE MOVE
  • OSZILATOR HEADING DOWN,
  • MOMENTUM IS STRONG,
  • OTHER INDICATORS CONFIRMS THE DIRECTION.

IN SUCH CASES YOU CAN ENTER THE TRADE EARLIER.

 

FILTER OUT TIGHT RANGES

WHEN THE MARKET IS IN A TIGHT RANGE IGNORE UPCOMING ENTRY SIGNALS AS LONG THE PRICE IS IN THE RANGE.

ENTER THE TRADE IN THE DIRECTION FROM THE SIGNAL AFTER A CLEAR BREAK OF THE RANGE.

 

CHOOSE THE BEST STOP LOSS LEVEL

LOOK TO SUPPORT/RESISTANCE, FIBS AND PIVOTS. CHOOSE THE STRONGEST RESISTANCE OR SUPPORTLEVEL FOR THE STOPLOSS.

 

USE TREND CORRECTIONS

THE BASIC RULE SAYS. TRADE WITH THE TREND. HOWEVER, ADVANCED TRADERS CAN USE COUNTERTRENDS AND CORRECTIONS TO MAKE SOME EXTRAPROFITS.

FOR THIS YOU HAVE TO DETERMINE THE TREND AND LOOK FOR POSSIBLE TURING POINTS IN THE TREND.

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(TRENDLINES, FIBS, PIVOTS) ENTER THE TRADE WHEN A POSSIBLE TURNING POINT IS COMING UP AND YOU HAVE A SIGNAL FROM THE STRATEGY. USE A TARGET FROM 50-100 PIPS.

 

GENERAL:

WRITE A TRADE DIARY AND ANALYSE YOUR TRADES.

DONT SIT THE WHOLE DAY IN FRONT OF YOUR SCREENS—IT IS MORE THEN ENOUGH WHEN YOU CHECK YOUR CHARTS EVERY FEW HOURS.

TRADE AT FIXED TIMES.

SHARE YOUR RIKS TRADING MULTIPLE PAIRS.



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