What is the most simple forex trading strategy that’s profitable that you can explain to me?
The market moves mainly on emotion – greed and fear – which means that any economic news or decisions by important decision-makers, triggers one of these emotions to a larger of lesser extent.
This should tell you that a strategy always runs the danger of becoming ineffective.
7/21 crossover trading strategy
A 7/21 crossover trading strategy is one which beginners (and some professional traders) sometimes use. The strategy dictates that, when the 7 period moving average (MA) crosses the 21 period MA, you either buy or sell (depending on whether the crossover is upward or downward).
Entry is at the close of the crossing candle and stop is 5 pips above/below the crossing candle on a 1 hour (h1) chart.
Let’s look at a hypothetical example:-
If I guess there are a few thousand beginner traders who use this system after the open of the London or New York trading days, what will happen if I trade the same strategy?. But, rather than enter the trade at the point where the strategy dictates (close of crossing candle), I put and order in at 4 pips above/below the crossing candle?
Would my trading order have a good/average/bad chance of activating if the candle following the crossing candle, pulls back to the strategy’s stop level before resuming momentum in the direction of the cross-over?
Would it be possible for a trading coach to teach the strategy to a 1000 or more students, and then trade against his own students in the way I described above? How would those students know they are being exploited if the coach does not tell them?
The most profitable trading strategy is the one which you trade based on understanding what the charts tell you and the news of the moment.