I remember how I first traded forex. I'd open my trading platform and stare at the numbers bouncing up and down. Then I'd jump into the action. (It took me a while to figure out why I always started negative three in the profit/loss column. I didn't even know how the spread worked. )
Then I'd try to exit with a quick 7 pips. It didn't take me long to figure out that I needed a plan, but then this other question looms big. What system?
Let me help to easy the pain. If you are new, here is a simple system that works. Doubtless you have heard the saying that the trend is your friend. This is true.
Put some moving averages on your chart. Right now we don't care if they are simple moving averages or exponential moving averages. Make them make one 20 periods long. Make another 5 periods long.
Here's what you're looking for. You want the price to move between the two moving averages while in a trend.
For example, let's say the 20 is strongly pointing up. A bar has closed inside of the two averages. That's your setup.
Warning: Work Required
I don't know which time frame you'll be trading on (60 minute, daily, etc), you need to work out your own stop loss and profit target. Put those indicators on your charts and scroll back. Would a 15 pip stop kept you in winning trading (usually)? Figure that out and then demo trade.
This system has a lot going for it as you are trading with the trend (and yes, the trend is your friend).
Do you want to learn more about how I trade? I have just completed my brand new guide, “Forex Trading - What Finally Worked For Me".
Download it free here: Forex Trading
Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide