Forex Trading Strategy with Moving Average and MACD

The forex trading strategy who will analyze below is well known and used by several traders. This forex strategy helps each trader to enter in the forex market at the right time and to exit at the right time and at the recommended level.

This forex trading strategy has better performance in one hour (1h)  and daily charts.
The main purpose of this forex strategy is a successful sale or purchase only when the price crosses the moving averages in the direction of the trend. The success in forex trading is based on a set of rules that should be strictly followed.

This forex trading strategy includes the following indicators:

SMA(50) - Used as signal line

SMA(100)- Gives us a clear signal of trend

MACD (12,26,9)

ADX - Optionally

Rules for buy order

• We waiting the price to move above the SMA(50) and SMA(100).
• When the price has crossed up the nearest SMA by 10 pips or more, we put a buy order (long) with condition that the MACD has turned positive in upwards at least for the last five candles.

Stop Loss

We define the stop loss at the low of the last five candles before the entry point.

Take Profit

Close half position, at point which is double the risk, and move our stop-loss at breakeven point.

Close the remaining half position when the price break down the SMA (50) for 10 pips.

Rules for sell order

• We waiting the price to move below the SMA(50) and SMA(100).

• When the price has crossed down the nearest SMA by 10 pips or more, we put a sell order (short) with  condition that the MACD has turned negative in downwards at least for the last five candles.

Stop Loss

We define the stop loss at the high of the last five candles before the entry point.

Take Profit

Close half position, at point which is double the risk, and move our stop-loss at breakeven point.

Close the remaining half position when the price breaks up the SMA(50) for 10 pips.

Notes

If the price moves between the SMA (50) and SMA (100), then in this case we do not place any trading order in the forex market.

We use the change of direction of the MACD in positive or negative and asking to have happen in the last five candles, because we want the forex signal to be strong and the momentum to be relatively at the beginning, so you do not  have the risk of weaken the trend.

With this forex trading strategy, if we use daily charts, earnings can to be considerably higher, although the risk is also greater. Such a position can remain open for a long time.

This forex trading strategy helps us to enter into a trend at the most profitable time, but we must realize that forex strategy works well in markets that have trend, and keep this trend, even for a short period of time.

Should be added that it is important to check the power of the trend at the point of entry. On this issue, the ADX can help us, which is the indicator that will show us that there is enough momentum in order to continue the trend and price movement.

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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