Day Trading Forex Trend Line Strategy – Forex Day Trading System

In order to trade forex trend line setups productively I live by 5 simple rules . While there are many rules out there , these are but a few that should make any trend line trading strategy more successful when used properly and combined with sound money management.

1.) Only trade the 3-5th test off a already identified trend line. Prior to bounce #3 the trend line cannot be established, and following test number #5 off a trend line the direction in the forex market usually will fade . The main point here is no direction in the currency market is sustainable forever , and while you may be able to successfully take a forex trade off a trendline bounce #6 and beyond, your chances of a profitable trade decrease dramatically.

2.) Trade trend lines that are “gently slanting”. If the trend line is at or above 45 degrees, the odds of it maintaining that trend line are less than a trend line of only 20 degrees. Very rarley does the market travel in one direction without letup at a steep angle. Quite often after a steep drop or rise in price the forex market usually quickly reverses thus eleminating any steep trend line and therefore should be avoided . The fact is it takes extreme buying or selling pressure to cause the market to enter a steep move, and steep trend lines even for a large player in the forex market are not eaisly sustained for extended periods of time.

3.) Always have a plan to enter when and/or if the market reaches a given trend line. Simply entering when the price hits the trend line is an option, and combined with safe money management could be profitable . A second option is to have an additional variable or requirement to signal an entry . One often used in our live forex education room is throughly covered in detail in the article entitled , Forex Entry Signals For Day Trading – When To Enter which can be found by following the link at the end of the article which will take you to our site, Day Trading Forex Live.

4.) Only take a forex day trade during liquid periods of a trading session. During these active times such as market opens/closes, trend lines will be honored with a higher frequency, and therefore tend to be more fruitful over the course of time. Additionally these liquid times create the largest moves and thus can potentially increase the risk/reward of a given forex trade setup because of the larger range.

5.) As with most other forex trading strategies and scalping setups, to give yourself the highest odds of having a profitable forex trade , only take a trend line bounce in the direction of the larger trend. This ensures that even if the market goes against you and the trend line breaks , you still have the overall underlying trend in the favor of your trade setup. Over the course of time you will become more comfortable with this forex trade strategy and thus more profitable. Then and only then should you start to look for forex trend line bounce trade setups against the overall direction of the market .

When you trade the forex market with a plan your success rate increases drastically over simply taking a forex trade when it “looks good”. If you follow these 5 simple rules to effectively day trade trend lines will bolster any forex day trading strategy that takes advantage of frequently occurring intra-day trend lines. If you would like to learn more about trading forex trendlines in the forex market, in addition to our other forex trading strategies , feel free to check out our site Day Trading Forex Live.

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