This is a guest post by Matt Smith
I’m going to show you the lowest-risk, most reliable trading entry signal there is. It requires no fancy software or cutting-edge, “latest and greatest” system. In fact, it’s something you may have even heard of before, but ignored it as you were perhaps persuaded by some “fancy” new system.
Anyway, let’s get to it…
I’ve broken the process down into three extremely easy steps. Now, remember what I said, it’s nothing new or special – BUT, it works!
Step #1 – Be prepared to enter the market only in the direction that the market is going. This is called trading with the trend (you’ve probably heard of it before!).
Step #2 – We wait for a pullback against the main trend (yes, you’ve probably heard of a pullback before too!).
Step #3 – As the market stops pulling back and starts going WITH the trend again… we pull the trigger and enter.
Without any doubt this is the lowest-risk trade you can take.
Now, maybe you were hoping for specific rules on when exactly to enter, unfortunately I don’t have space in this short article. Successful trading requires a detailed strategy – one that certainly can’t be detailed in fewer than 300 words!
But, re-read the three steps above, and then think back on the system and strategies you’ve seen on you journey through Forex so far. I can pretty much guarantee that the most promising of those strategies followed something similar to the three steps above.
There are two reasons why the three steps above provide the lowest-risk trade you can make (and you need to know these reasons!).
Reason #1 – You are trading WITH the trend. This means you have the probability of a trade working out in your favour.
Reason #2 – Because of exactly where you enter a trade your stoploss is always very small – getting out for a small loss (and not a big one!) is critical to your success.
I’m going to throw in a little bonus here. At the bottom of this article is a link where you can download a FREE trading strategy. Now, it’s not a typical strategy, it’s something that can improve ANY Forex strategy, system or method you already trade.
Matt Smith is creator of the Forex Trendsetter system. His system is based on the three steps above for making low-risk, high probability trades. Check out Forex Trendsetter here.