If you have been reading our blog, you must have realized by now that we trade only price action patterns. Indicators are misleading and most of the time they just give the signal too late. Learning how to trade price action will help you become a consistently profitable trader. You can watch this webinar recording on how to trade forex price action naked. Now if you are looking for a price action based manual trading strategy than you can take a look at this Fast FX Profits Manual Strategy.
As you can see in the above screenshot this is a set and forget manual strategy. Fast FX Profits basically a 28 page manual that teaches 3 similar price action based strategies. You are going to learn how to setup the stop loss and take profit with 3 different levels. You can choose the level that best suits your personality and style. Take a look at the following screenshot.
In the above screenshot you can see a GBPUSD sell trade with profit of 60 pips. Now you must keep this in mind that this manual strategy works on M15 and higher timeframes so don’t try to use it on M5 and M1 timeframes.
Above is another screenshot that shows a EURJPY buy trade with a profit of 72 pips. This is what you should do. First test these manual trading strategies on the demo account. As said above these are almost similar trading strategies. The only difference is the take profit target levels. You should test the 3 different take profit levels and see which one gives the highest winrate. Choose that strategies. Obviously each currency pair will have a different best take profit level.
Now we haven’t tested this strategy. The most important thing that you should note is the reward/risk ratio for each trade. If you want to become a consistent winner than you must choose a strategy that always gives a reward/risk ratio of at least 2:1 per trade. This simple rule will always help you. When you are trading with a strategy that has a reward/risk ratio of 2:1, you will always easily recover a loss. For each trade won, you can lose 2 trades with this reward/risk. If you increase reward/risk to 3:1, for each trade won you can lose 3 trades. So now you should know the importance of reward/risk in trading.
We read somewhere a trader saying that reward/risk is not an important matrix. Nothing can be further from the truth. You can easily achieve a reward/risk of 2:1. What’s the point of trading with a strategy that gives 1:1 reward to risk. When you trade binary options your reward to risk is even lower it is 0.8:1 meaning you will always make less than what you risk. You should understand the importance of this matrix if you want to become a consistently profitable trader.