The K.I.S.S. Method from A-Z – Part 1

Filed under: Learn Forex Trading |

 

For today’s forex related article, I want to talk you through my method of trading, which I am rather unimaginatively calling the K.I.S.S. method (Keep It Simple, Stupid). I aim to go through this in two parts, detailing exactly how I trade and what I look out for. Furthermore, I will try to keep the jargon to a minimum so it is easy to follow for any beginners out there looking to get involved in trading forex.

 

1. Keeping the Charts Clean

If you would like to try my method of trading, then the first thing you will need to do is to clean your charts up and choose to display them as candlestick charts. This means formatting them with a white background, having black and white candlesticks, and not using any indictors other than an 8-day EMA (exponential moving average) and a 21-day EMA. The pairs that I trade are: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD, USD/JPY, EUR/JPY, GOLD, SILVER, GBP/JPY, and AUD/JPY; so you will need to have all of these charts open on your trading platform.

 

2. Marking in Significant Levels of Support and Resistance

Next, you will need to go through your charts on a daily timeframe and mark in any significant levels of support and resistance. This is the tricky part because it is quite a subjective thing to do and therefore everyone will get slightly different results for this. The basic idea is to find any levels that the market reacted to, and draw in horizontal lines on the chart. The most recent swing high and low are usually significant, and any level that has been respected on two or more occasions. The more the level has been respected, then the more weight that level will hold.

 

(Take a look at Part 2 of this article to learn more…)

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