Sunday, June 28, 2009
Super Long-term Breakout Strategy
Why do I call this strategy the super long-term breakout strategy? Well, it is because this strategy is used for long-term trading and it is very profitable.
The concept is simple. When a breakout occurs and the breakout is from a very very strong and long-time support or resistance, the price will 90% move further and further past the support or resistance, creating a super strong trend in its direction.
So what is this strategy? Simple. When you see such breakout, wait for a while to make sure it is not a fake break, and then trade in its direction! Of course, you can do some indicator analysis or candlesticks for confirmation but then again, when there is such a breakout, you know you will have some high chances to reap some long-term profits.
Using Candlesticks together with Indicators
This is one of the most effective strategies to use when trading Forex. Using Candlesticks together with Indicators.
Candlesticks are good signals. They show you the price actions and they show you where the market is likely to go. But sometimes, candlesticks maybe wrong.
Indicators, on the other hand, are doing the same thing but for a longer period of time. Usually, they work on past data of the market and at the same time, tell you the movement of the market based on the averages of the past data. They maybe good but they lag behind. Following solely on indicators will not ensure that you trade at the correct time.
But by combining indicators and candlesticks analysis, you have double confirmation and can trade more confidently. My favorite strategy is using Candlesticks with Stochastics. When the stochastics indicate Oversold and when I see a reversal candlestick signal, I know that it is Buy time!