Get a Trading System

• Find a trading system that works for you. A good place to start your research is at ForexPeaceArmy.com or EliteTrader.com. These are both well-known trading forums that offer independent third-party reviews of software programs and trading systems. Affiliate links aren't allowed, so for the most part you are getting unbiased opinions. A couple of systems on the daily charts that work well and you might consider are MarketClub for Smart Traders and Stealth Forex.
  
  

Use the 2-Period RSI

• Use a 2-period RSI (relative strength indicator). A well-known trader named Larry Connors did 10 years of statistical back-testing with this indicator and found that when it is below 10, there is a statistical edge that the markets will move up. Likewise, when the RSI is above 90 it, will likely move down. Couple this with a good entry system and you have a viable trading system.
  
  

Use the Daily With Weekly Charts

• Use the daily and the weekly time frames to trade with. Use the weekly charts to to determine the trend and the daily charts for entry and exit signals. In other words, look at your trading system and if it indicates a "buy" signal on the weekly charts, then look at the daily charts and only take buy signals. Likewise, if the weekly charts say to sell, only take sell signals on the daily charts.
  
  

Making It Work

• Put it all together. When you have a buy signal on the weekly charts, then move to the daily charts. If you have a buy signal there, look at the 2-period RSI. If its last low was below 10, take the signal; if not, ignore it. If you have a sell signal on the weekly chart, look for sell signals on the daily chart. If you have a signal, look to the 2-period RSI, and if the last high reading was 90 or above, take the signal; if not, ignore it.
  
  

Find the Best Pairs

• Choose your pairs. This trading system generally works well with the following Forex pairs: EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, NZD/USD, EUR/JPY and GBP/JPY.