Simple and highly profitable trading method
This strategy is suitable for beginners, and with discipline, it can work for anyone. Let's dive into it:
1. Set moving averages
Apply three moving averages to your chart:
6-day moving average (short-term trend).
20-day moving average (medium-term trend).
40-day moving average (long-term trend).
A 40-day moving average acts as a major support or resistance level.
2. Allocating funds
Divide your capital into three equal parts.
Stage 1: When the price breaks above the 6-day moving average, invest 33% of your capital.
Step 2: If the price breaks above the 20-day moving average, add another 33%.
Stage 3: Once the price crosses the 40-day moving average, invest the remaining 33%.
3. Exit Strategy
If the price drops back below the 6-day moving average, sell your first position.
If it drops below the 20-day moving average, sell another 33%.
If all three moving averages are broken, sell everything and exit the trade completely.
4. Re-entry Rules
If the price bounces and breaks above the 6-day or 20-day moving average again, re-enter with the same allocation strategy.
5. Sell at Rise
Use the reverse method to sell:
When the price starts to decline, sell 33% when it drops below the 6-day moving average.
Hold the remaining portion unless the price drops below the 20-day and 40-day moving averages.
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Discipline is everything
This strategy may seem simple, but its success lies in strict execution. Emotional trading or ignoring your stop loss levels will lead to unnecessary losses. Stick to the rules and you will see consistent results over time. This method has changed my trading and my life. While no strategy is 100% guaranteed to succeed, following these principles can help you navigate the market with confidence and minimize risk.