We will present a forex trading strategy which is and also used as a trend
trading system.
Is extremely simple, and when applied correctly and follow the rules produce
satisfactory profits.
We can apply this forex trading strategy to EUR, GBP, JPY, AUD forex
pairs.
We have to avoid to enter in the forex market when we have a consolidation, also if
we want to enter in the market to put orders near to news announcement it’s
better to wait 30min after the news, and then to put a trading order.
Timeframe : 1 hour and 5 min chart.
The forex trading strategy contains the following indicators :
- EMA(8) – Exponential Moving Average
- EMA(21) - Exponential Moving Average
- OsMA(12, 26, 9)
- Fibonacci Retracements
We use the EMA’s to determine the trend.
We use OsMA to determine the entry point on 5 min chart. When the histogram on 5 min chart goes from below to above the zero line it is an entry forex signal to the upside.
When the histogram on 5 min chart goes from above to below the zero line it’s an entry forex signal for the downside.
When we have determine the trend we need to find the most recent swing high
and swing low points.
We use these swing high and swing low to draw fibonacci retracement in order to know support and resistance levels based on the retracement levels.
Buy Rules
We find most recent swing points and draw fibonacci retracement.
We have to wait for price to retrace at least to the 38% retracement level
and no more than the 78% retracement level on the 1 hour chart.
We open 5 min chart for the entry point. We have to wait until the OsMA to
form a new bar above the zero line.
This is the signal we want and after that we open a buy order.
This is the signal we want and after that we open a buy order.
Stop Loss
We can use previous swing low on 1 hour chart as stop loss level.
Sell Rules
EMA(8) is below EMA(21) on 1 hour chart.
We find most recent swing points and draw fibonacci retracement.
We have to wait for price to retrace at least to the 38% retracement level
and no more than the 78% retracement level on the 1 hour chart.
We open 5 min chart for the entry point. We have to wait until the OsMA to
form a new bar below the zero line. This is the signal we want and after that we open a sell order.
Stop Loss
We can use previous swing high on 1 hour chart as stop loss level.
Take Profit
We have to realise that we trade on the 5 min chart. It means that we have to
wait for a profit in pips relative to this timeframe.
The best way is to use fibonacci retracement levels and fibonacci expansions
levels.
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.
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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