Long Term Forex Trading For Big Profits

My own forex trading system is based on the 4 hour charts, but I was looking at the long-term monthly charts earlier today and thinking how much easier it would be to make decent profits just by trading basic indicators on these monthly charts.

For example if you plot two exponential moving averages with periods of 5 and 20 and look at the monthly charts of the GBP/USD, EUR/USD and USD/JPY currency pairs, you will see how often these EMA crossovers generate big profits. The EMA (5) doesn’t cross over the EMA (20) very often on these monthly charts but when it does it very often results in long sustained price moves and gains of anything from 100-200 points right up to 3000 points if you enter straight after the crossover occurs.

Let’s take the GBP/USD as an example. You will see that the EMAs crossed upwards in the middle of 2002 and didn’t cross downwards again until 2005. If you had stayed in this position until it’s conclusion you would have netted nearly 3000 points, assuming you had entered and exited at the optimum points close to the EMA (5).

This downwards crossover in September 2005 would have resulted in a loss of a few hundred points if you had exited on the reverse crossover but this upwards crossover saw another 3000 point move at it’s maximum peak, and still would have yielded a decent profit if you had held on until it’s conclusion. Also you can see that the most recent crossover occurred in August of this year and this too would have yielded a substantial profit and is still well into profit at the present time.

So the point I want to get across in this article is that if you have the patience to trade the monthly (or even quarterly) charts, then there are substantial profits to be made by trading this way, even if you use very basic trading methods such as the EMA crossover method.

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