Forex trading strategy #19 (Simple Stepping into Position)
Submitted by User on March 24, 2009 - 11:00.
Submitted by Marie
I’m a senior living in Canada. I like the idea of position trading forex, but I can’t afford the draw downs. I’m hoping that the following system will satisfy my “day trader inclinations” but will edge towards holding positions for the longer term. It also should increase the use of leverage. With only one position with risk open at a time, entry with each new signal can be taken, pyramiding gains. I’ll appreciate suggestions for improvement. I’ve enjoyed reading all of the postings on this site.
Simple Stepping into Position
Pairs: Any (watch multiple)
50 sma 1 hour chart
Candlestick reversal (Or use other reversal Patterns)
Filter: 200 sma 4 hour chart
4h 200 sma going sideways or sloping down
Look for reversal patterns in the vicinity of the 1h 50 sma. These can be taken from anywhere above the line to a small distance below the line. If the 200 sma is going sideways, make sure the 50 sma is sloping down.
If the 4h 200 sma is sloping down, the direction of the 1h 50 sma doesn’t matter.
Long entry is opposite.
Enter your trade in 2 sections. The size of section 1 is twice that of section 2. SL is 5
pips outside of the extreme reversal high or low. TP for section 1 = entry price plus or minus (2 x the difference between the entry price and the stop loss). Enter a trailing stop by the same range on section 2. After the trailing stop on section 2 has moved twice, remove it and start locking in ½ profits. Never reduce the size of the stop. Only move it in the direction of profit. Should the profit exceed 4 X the average daily range, start locking in ¾ of profits. On section 2 trades, just take whatever profit the market gives .
Risk/ Reward example
Stop loss 50 X 3 150
Take Profit 2x100 200 2nd section gets stopped out at break even
net gain 50
Minimum risk/reward 1: 1.33