Forex Trading Strategy for High Profits with RSI as Filter

All forex trading strategies has the aim to assist each trader to spot a profitable forex signal in order to enter in the forex market with great probabilities to gain profit whereas the risk will be limited. 

This forex trading strategy is utilized by many traders for intraday forex signals.

The forex trading strategy contains the following indicators:

• EMA(5) - Exponential Moving Average of five (5) periods. Apply to close.
• EMA(12) - Exponential average of twelve (12) periods. Apply to close.
• RSI (21) - Relative Strength Index twenty-one (21) periods.

Our objective  with this forex trading strategy is to to take advantage of the cross between of the  two exponential moving averages and together with the RSI level will appraise the cross.

If the analysis is positive, then we have a forex signal, whereas in the opposite case where the analysis of cross is negative we have to stay out of the forex market looking forward for another forex trading signal.

The forex trading strategy used in the hourly (1H) chart.

Buy Rules

According to the rules of forex trading strategy should open a buy (Long) position, once the EMA(5) create an upward cross  to EMA(12).

Forex trading strategy also requires the RSI (21) to have a value greater than 50 level.

Stop Loss

Determine the amount of Stop-Loss between twenty and thirty points. At this point, traders should remember that for the level of stop loss  have to study several factors that are completely different each time and have an immediate relationship with the value chart.

Forex technical analysis is the one that may facilitate to spot those factors which probably will be, the levels of nearest supports, previous extreme points (pivot point), and some others.

Close Long Position

Observing the principles of forex trading strategy, we are able to close our long position when EMA(5) can create a downward cross to EMA(12) or when the RSI (21) will have a price less than fifty ‘50’ level.

We have to review always our chart and aware when the price action approach a major resistance, or a major support, even when presented downward engulfing candles or potential reversal candles, and of course when the price reaches pivot points.

Sell Rules

Exactly the opposite from buy rules.

Important : All investors should know that any forex trading strategy before implementing in a real account needs to be tested in a demo account in order to be fully understood.

Also, all traders should be aware that extraordinary events occurring in the forex market very often, and is likely to alter the financial results of a forex trading strategy.

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