Forex Cash Cow part 1

Over time I have read and tested many trading ideas for different markets. In the past I was naive enough to think that the more complex and the more time and effort I put into designing a trading strategy the better it will work and the more money I will make. It took time and some loss of money in order for me to learn that it is the simplest and easiest to implement trading strategies that yield the best results. Using common sense with correct money management is the key. Understand and follow these two principles, and I guarantee you will be light years ahead of the 95% losing crowd.

I believe that a good trading strategy is one that exploits certain occurrences in the market that do not happen very often. While the losing crowd tries to trade every day and force trades on non- existent opportunities the winners wait like hunters for those high probability low risk trades.

Strategy Implementation

I refer to the Forex Cash Cow strategy as my bread and butter strategy! There are several reasons of why I like it so much. First, it is very accurate, probably the most accurate strategy I am currently using. Second, it does not occur every day, on an average I expect to see it 3-4 times per month. This means less stress for the trader and more free time to pursue other activities. Third, most of the time I know a day in advance if there is going to potentially be a signal or not. Fourth, it has the potential of providing a very nice profit for the patient trader.

The logic behind this strategy is simple, once the market has “exploded” price wise to a certain direction it will continue moving in that direction until it runs out of fuel. The Forex Cash Cow strategy aims to catch the move from the moment the market has proven to have “exploded” to the moment it runs out of fuel! The idea is simple, instead of speculating if and when a large move in price is due we just wait for the market to tell us “I started moving hard and fast, please join!”.

The Forex Cash Cow strategy works very well in the currency market simply because this market possesses the characteristic of having various sharp and long price swings. I have noticed that throughout the month currencies tend to have various strong two day trends. These two day trends are what this strategy aims to exploit.

The one thing that always bothered me when trading currencies are the fake moves that occur prior to the market really deciding on a direction. This phenomenon is very common in volatile markets and can kill you if you do not know how to handle it. Don’t get me wrong, volatility is very good for a trader. Without sharp moves we cannot make those handsome profits in the short term. However, you have to know how to approach this volatility.