Trading Strategy for Forex Market

Key Overview

• Goal: Earn hundreds of dollars a day using a simple strategy.
• Target: 20 pips per day.
• Currency Pair: Example with EUR/USD on a 50-minute chart.

Important Concepts

Account Size & Pip Value

• Impact of Account Size
  • $100 account: max loss $2 (2%), profit target $4 (4%).
  • $1,000 account: max loss $20 (2%), profit target $40 (4%).
  • $10,000 account: max loss $200 (2%), profit target $400 (4%).
• Risk Management
  • Aim for at least 4% profit if risking 2%.
  • One-to-two risk-reward ratio (risk 2%, target 4%).

Calculating Lot Size

• Use ForexTime.com Calculator
  • Enter number of pips (20 pips).
  • Choose currency pair (EUR/USD).
  • Adjust trade size in lots to match profit target.

Trading Strategy

Indicators Used

• Chen Money Flow (CMF)
  • Measures money flow in/out reflecting buying/selling pressure over a set period.
  • Look for CMF to cross above/below zero value.
• 100-Period Moving Average
  • Added for trend direction confirmation.

Setting Up Indicators

• CMF Indicator
  • Add via indicators tab (type CMF).
  • Plots a line that crosses zero value.
• 100-Period Moving Average
  • Add via indicators tab (type simple moving average).
  • Adjust length to 100.
  • Change color for better visibility.

Trade Execution

Buy Signal

• CMF crosses above zero (strong buying pressure).
• Price above the 100-period moving average (confirm uptrend).

Sell Signal

• CMF dips below zero (increased selling pressure).
• Price below the 100-period moving average (confirm downtrend).

Example Trades

Sell Trade Example

• EUR/USD on 50-min chart
  • Market showed a bearish trend on 1-hour chart.
  • Moving average above price indicated downtrend.
  • CMF dropping during indecision led to bearish breakout.
  • Stop loss: 10 pips, Take profit: 20 pips.
  • Result: Trade hit 20 pips profit, earning $200.

Buy Trade Example

• EUR/USD on 50-min chart
  • Market showed a bullish trend on 1-hour chart.
  • Price above 100-period moving average.
  • CMF crossed above zero indicating buying pressure.
  • Consider previous high zone but ample space to move.
  • Stop loss: 10 pips, Take profit: 20 pips.
  • Result: Trade hit 20 pips profit, exceeding target.

Additional Notes

• Trading community available for further learning and shared experiences.
• Link for VIP trading community in description.