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:
Entry for uptrend: when the price is above 150 SMA look for RSI to plunge below 20. Then look at Stochastic - once the Stochastic lines crossover occur and it is (must be) below 30 - enter Long with a new price bar.
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Hi Edward,
I have really enjoyed reading though your website! I really like this trading system but I would like to use it on shorter time frames. I was just wondering what setting you would suggest for the RSI, stochastic, and moving average for some of the shorter time frames(hour,3hr,4hr) or if you have tested this strategie on any of the shorter time frames?
Thanks,
Nick
Hi Nick,
Thank you.
I thought of making this strategy work on smaller time frames.
Current setup won't work well there, and, unfortunately, I haven't come up with a winning idea yet despite trying for several times to make it happen...
I'll take another look at it next week. In the meantime any feedbacks and suggestions are welcome!
Regards,
Edward.
Hi Edward,
I like this strategy, good job. I will definetely test it. One different thing I will try is that I will change candles into H-A candles to pin-point more accurate entries (change of H-A color as an additional confirmation). H-A candles are also good to identify exit.
What do You think about it.
DM
Absolutely. Heikin-ashi candles will fit here well and help with entries and exits too. Thank you for this valuable addition.
Best regards,
Edward
Hi Edward,
Can we use this strategy without SMA 150, I have noticed that many profitable trades were ignored because of SMA.
Andris
Hi Andris,
I use SMA 150 to define a trend and thus a direction in which to trade. If you'd like to take trades in both directions, you may need no SMA.
Regards,
Edward.
Hi Edward,
Hows the profit for GBP/JPY using your system,which pair would be the most effective one?
Maybe you have paper tested this system for long time,howlong you profit from live account then
Hope to get your reply and instructions
Ele
Hi Ele,
I traded this system live for quite a time. Paper trading took only couple of months. Back then I started with EUR/USD, but ended up with GBP/USD and GBP/JPY pairs. I like this system a lot for its simplicity and accuracy.
I no longer have testing results for the systems I posted on this website. Now I regret about not keeping notes back then... I never knew I was going to open a website one day. Now, all rules and systems are mixed, I trade a combination of different systems and setups...
I'm very sorry if my answer is somewhere disappointing...
Regards,
Edward
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