This Daily MT4 Chart Forex Trading Strategy is a straightforward Forex trading strategy that beginner Forex traders find easy to use. If you think trading the daily chart fits your forex lifestyle better than intra-day trading, take this simple trading strategy for a spin.
Forex Daily Chart Trading Setup
- MT4 Currency Pair: Any
- Timeframe: Daily Chart
- Forex Indicators: stochastic forex indicator required with default setting(5,3,3)
- Fibonacci: Fib Retracement tool
- Candlesticks: Knowledge of reversal chart candlesticks
Did you know that an mt4 daily chart trading strategy has many more advantages than trading in smaller chart timeframes?
- Trades are less frequent, which means you don’t overtrade
- Less market noise is involved in the daily timeframe compared to the 1 hr or the 30 min and much lower chart timeframes.
- The trading entry signals tend to be much more reliable as well.
- Much more significant profit potential.
The stop loss(SL) would tend to have a considerable distance based on the daily chart.
Does that mean your risk is enormous?
Yes. and no.
Your trading risk should be set with an eye towards a percentage of your forex trading capital. In Forex, we have many variations of market lot sizes we can trade, so while the protective stop in pips may be significant, it can still be a tiny percentage of your risk capital.
BACKGROUND OF TRADING OFF THE MT4 DAILY CHART FOREX TRADING STRATEGY
We all know that a forex market will trend and consolidate. It will do the same and repeat this over and over again. A chart uptrend will eventually turn into a downtrend, and the opposite is true.
We will get corrective moves between a full-blown trend change, which is what this simple mt4 daily chart trading strategy wants to capitalize on. We want to see the price meet up with one of our Fibonacci levels and confirm with our forex stochastic oscillator.
RULES OF THE MT4 DAILY CHART FOREX TRADING STRATEGY
The rules are relatively easy, and this is a pretty simple Forex strategy that you should be able to copy. Just follow the forex trading instructions listed below.
FOREX DAILY MT4 CHART TRADING STRATEGY
- The Forex pair was in a chart downtrend, and we used an objective trend measure – a trend line break.
- We also had chart price take out a previous high, setting the stage for an uptrend.
- Once a high is in chart place, we can draw our Fibonacci retracement levels.
- Price pulls back to the fib 61.8% retracement level and puts in a beautiful chart price action reversal candlestick.
- Stochastic was just in a chart oversold zone, so this is a good trade, and we placed a buy-stop trading order at the high of the reversal.
- Take profit was the primary swing high in the negative market trend. This has a 4.56 reward to risk (R: R) ratio.
ADVANTAGES OF THE DAILY MT4 CHART FOREX TRADING SYSTEM
- This is one of those simple Forex trading strategies that have the potential to give you over 99 pips a day due to it being a more extensive time frame trading strategy.
- We don’t have to worry about random price fluctuations or news releases affecting day traders.
- The daily trend carries more weight than intra-day, so you benefit from having wrong-footed day traders propelling your trade.
- We think it is a pretty easy Forex trading system that you can learn quickly.
DISADVANTAGES OF THE MT4 DAILY CHART FOREX TRADING SYSTEM
- We wish We could tell you that this is a holy grail Forex trading strategy, but We can’t.all trading strategies will suffer due to inherent weaknesses, and this system is a non-trending market.
- This will not appeal to forex traders who need constant trading action.
- Some traders may not like stops in the 50-100 pip range.