Trade On Forex

Big fans included trading legends such as Richard Dennis, so if its good sufficient for him its good sufficient for you! The law was originally developed in the late 70s to trade commodities but can be used on any trending market and currencies trend well.

Now this law is so simple it consists of just one rule and here it is:

1) Close any short positions and go long whenever the price exceeds the highs of the old 4 calendar weeks.

2) Close any long positions and go short whenever the price falls below the lows of the old 4 calendar weeks.

If the law is run with a Sar (stop and reverse), the above law will all the time claim a position in the market (either long or short).

Does it work?

Back test and you will see it does.

Of procedure it works very well in trending markets ensuring you are on the right side of every big move - but like all trading systems there is a downside:

It will get whipped in a choppy sideways market and here you may wish to reconsider some filters: A coarse explication to this qoute is to enter on the 4 week rule (the breakout), and to exit on a shorter time frame such as 1 or 2 weeks.

Traders can also use other exit rules i.e. Exit when a keen midpoint is broken. For example, applying a 10-day keen midpoint as the exit - A 10-day keen midpoint is one-half of the entry signal (four weeks is of procedure 20 trading days) is period we like. You can also experiment with Adx Rsi and Macd filters if you wish.

Many traders ignore this system; after all it's not trendy or complicated like chaos law or synthetic brain based systems, or full of mystical nonsense like Gann, Elliot Wave or Fibonacci - but it works.

Simple systems work best than complicated ones as they have fewer elements to break. If you are concerned in making money long term and have a disciplined nature you will like this system. If you believe complexity will beat the markets, they move to a scientific law or enjoy the buzz of trading oftentimes - you won't like it - This law is all about making money long term in a disciplined fashion.

The 4 week rule is simple you can customize it to restrict losses, by adding filter and it will have you on the right side of every major move - do that and you have great behalf potential.

So if you want to trade forex on autopilot and make big long term gains, reconsider this free law and you maybe glad you did.