Advanced system #3 (Neat entry: RSI + Full Stochastic)
Submitted by Edward Revy on May 13, 2007 - 15:40.
Current strategy has won the hearts of many Forex traders. And why not when it has a great winning potential.
Strategy requirements/setup:
Time frame: daily
Currency pair: any
Trading setup: SMA 150,
RSI (3) with horizontal lines at 80 and 20,
Full Stochastic (6, 3, 3) with horizontal lines at 70 and 30.
Trading rules:
Read entire post >>>
Hi John,
When price is above 150 SMA you'll be looking for Buying opportunities, when price is below 150 SMA - for Selling opportunities; so yes, you can use SMA to trade in both directions, if that's what you meant.
Best regards,
Edward
Hi Edward,
Thanks. What I meant is not using the SMA, and trade whatever signal is given, be it buy or sell.
Sorry, my fault :)
you meant trading without SMA. Right.
150 SMA serves as a filter here. It is probably the main "ingredient" of the strategy. Without it, you'll have many more false buy and sell signals from RSI and Stochastic.
I haven't tried, but if you want to get rid of this Moving average, you'll still need to think of a substitution - an indicator or a method to show you the prevailing trend.
Best regards,
Edward
Hi Edward,
Did you try to combine Bollinger bans with this strategy. What is your opinion?
Thanks,
Alex
Hi Alex,
I didn't want to add any more indicators to this system.
Bollinger bands can be used as a visual aid to observe periods of high and low volatility. Also, when price rockets outside the bands - the trend is in full swing, you can trail a top closer and be ready to exit when the move is over.
In my previous comments I also recommended to use Acceleration bands for the same purpose.
Here is a good reference about Acceleration Bands indicator
Best regards,
Edward
Follow new discussion here: http://forums.forex-strategies-revealed.com/advanced-system-neat-entry-t...
Thomas
Hi Edward,
Thank You for your respond and advise about Acc Bands Ind. I'm definitely gonna try it. There is one more thing I wanted to ask you. I hate to add more indicators and I completely agree with you regarding that. But... This is Medium term momentum strategy and normally we are planning to stay in trade 2-12 days. You use 150 SMA to discover Long term trend direction.
Have you ever though to add something to get a clue about next 2-10 days.
Again thank you so much for what are doing here.
Best regards,
Alex
I add MACD (3,10,1) into the Daily chart for optimum profit taking. I exit short trade when MACD cross above 0 level and long trade when MACD cross below 0 level. Interestingly, MACD (3,10,1) could also help in entry.
MSK