Here we will outline a forex trading system which consists of just one rule anyone can use and apply for big profits. This system takes the guesswork out of forex trading - all you do is follow the rule and you can make big gains...
The forex trading system we are going to look at here is called the 4 Week Rule and it's been around since the late seventies, when trading legend Richard Donchian developed it to trade commodities.
It works on any trending market and forex markets trend well here is the rule:
When the price hits a new high in a four week period, buy long and cover short positions. If the price fall to a four week low reverse and sell short.
Its so simple and your probably wondering does that simple rule really make money?
Well the answer is yes it does - simply test it and see.
Just because its simple doesn't mean it doesn't make money, all the best forex trading systems are simple.
This forex trading system has been used by some of the top traders around the world, as a basis for their forex trading strategies and if its good enough for them, then its good enough for you and me.
Does it have a downside?
Yes, it will get you in on every major move and when markets are trending, it will perform well - but when they go sideways, the system can get chopped about, so consider filtering the exit:
Smoothing the Equity Curve
Exist on a 1 or 2 week low or high and go flat. Execute the next open position on the 4 week rule. You can also use a moving average as a stop - test and see which gives you the best drawdown to gains.
When executing this system you need to have discipline and be aware its not fussy on pinpoint market timing and it doesn't trade that often. However, for the patient trader who is looking for a long term system which takes just 20 minutes a day and is proven to work - it's a fantastic system and its free.
Breakout trading works and with forex markets being such great trending markets, you can see why this system is a great one, for any trader seeking long term currency trading success.
Most traders will dismiss it as its simple but that's a mistake.
You get lots of systems that are clever and are based on chaos theory, neural networks and all sorts of science - but science and complicated systems, don't beat simple ones and that's a fact.
If science and complexity did help, we would have more winning traders than we did 50 years ago and we don't. The ratio still remains the same - 95% lose 5% win.
So try the 4 Week rule and you will be surprised, at how powerful and profitable this system can be.
It's free, proven and could help you enjoy currency trading success - check it out.
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