The 618 Trade
Trading the foreign exchange market, also known as the Forex market, can be quite challenging but rewarding. I have found joy and excitement as a retail Forex trader. It hasn't been a comfortable journey; I have had my fair share of failures and disappointments. I was stuck in a vicious cycle of switching strategies daily and never seeing constant profits. One morning I decided to craft a strategy that suited my trading tendencies, psychology, and that would help me control my overall anxiety.
I developed a highly profitable Forex system called the 618 trade. For clarity purposes, the perfect trading method doesn't exist, but executing a great trade is very achievable. Most novice Forex traders tend to get trapped in an endless quest to find a trading strategy that's 100% accurate. In the Forex universe, it's common to find an array of trading systems, and obtaining a bulletproof strategy is often an insurmountable task. It's easy to get discouraged, confused, and quit. Before we outline the 618 trade, we must address a crucial factor in trading, quality chart technology.
A well-equipped trader can find opportunities quicker than a trader using outdated chart tools. TradingView is an online and social platform that allows traders to exchange ideas and share technical analysis. TradingView is perfect for using indicators like moving averages, Bollinger bands, stochastic, RSI, and variations of common oscillators. TradingView has more than 100 indicators and elite drawing tools that are useful for charts.
Link: TradingView
The 618 trade is named after the 61.8% Fibonacci retracement level, arguably the most popular level. The inverse of .618 is 1.618, which is identified as the Golden Ratio. The 1.618 ratio is so powerful that it can be used to measure proportions of trees, animals, humans, atoms, stars, and the universe!
Find out more about the Golden Ratio: LINK
The Golden Ratio gives the 618 trade more validation and provides traders hope that a supernatural component of nature is on their side. The commonly used retracement levels are 38.2%, 50%, and 61.8%. This strategy will only focus on trading the 61.8% retracement level on a pullback. The 61.8% retracement is a respected level for both retail and bank traders.
Key Points
1) Only trade using the 61.8 Fibonacci retracement level when a noticeable pullback occurs.
2) The price must break out of consolidation. The break must be clear, clean, and convincing. If the price barely comes out of consolidation range, DON'T TRADE!
3) Only trade the FIRST significant break out of consolidation!
4) Use the time frame that demonstrates the cleanest break from consolidation.
5) Make sure that prior support/resistance is aligned with the 61.8% Fibonacci retracement level.
6) OPTIONAL: Use simple fundamental analysis to validate your trade.
Example:
This trading strategy is 90% accurate. Finding this trading opportunity will require patience and stealth. Happy trading!
The 618 trade is named after the 61.8% Fibonacci retracement level, arguably the most popular level. The inverse of .618 is 1.618, which is identified as the Golden Ratio. The 1.618 ratio is so powerful that it can be used to measure proportions of trees, animals, humans, atoms, stars, and the universe!
Find out more about the Golden Ratio: LINK
The Golden Ratio gives the 618 trade more validation and provides traders hope that a supernatural component of nature is on their side. The commonly used retracement levels are 38.2%, 50%, and 61.8%. This strategy will only focus on trading the 61.8% retracement level on a pullback. The 61.8% retracement is a respected level for both retail and bank traders.
Key Points
1) Only trade using the 61.8 Fibonacci retracement level when a noticeable pullback occurs.
2) The price must break out of consolidation. The break must be clear, clean, and convincing. If the price barely comes out of consolidation range, DON'T TRADE!
3) Only trade the FIRST significant break out of consolidation!
4) Use the time frame that demonstrates the cleanest break from consolidation.
5) Make sure that prior support/resistance is aligned with the 61.8% Fibonacci retracement level.
6) OPTIONAL: Use simple fundamental analysis to validate your trade.
Example:
This trading strategy is 90% accurate. Finding this trading opportunity will require patience and stealth. Happy trading!
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