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Forex trading strategy #5 (5x5 Simple system)

Just look what this trading strategy has to say. It's a simple yet quite promising Forex trading method. Trading strategies like this can only be discovered through a long and determined observation of the price behavior.

To start:
Currency: ANY
Time frame: 1 day
Indicators: 5 SMA, RSI 5

Entry rules: Buy when the price crosses over 5 SMA and makes + 10 pips up, the RSI must be over 50. Sell when the price crosses below the 5 SMA and makes +10 pips down, the RSI must be less than 50.
Exit rules: not set.

FOREX TRADING SYSTEM

It is a very very simple system, yet with quite impressive results.
Always remember to take actions/enter the trade only after the signaling candle is closed.

This Strategy or trading idea can be used to create more advanced trading version.


http://forex-strategies-revealed.com/


where would u set ur stop loss for this system?
I would recommend setting a stop loss for a Long position: 5 pips below the candle which closed above 5 SMA for the first time. Same when Shorting - 5 pips above the candle that has closed below 5 SMA for the first time.
is there any way this system can be tweaked to filter better trades?

Probably yes. Although I do not have an absolute solution, you may probably try adding 150 SMA on the chart to get a sense of a trend and then trade only in the direction of it, e.g. only Buy orders during an uptrend, only Sell orders - downtrend.
This will definitely become safer trading.

The other method I would try is simply drawing parallel/ channel lines each time you see the price coiling - trading in a tight range. Then I would not attempt to enter a trade until this channel is broken.
Edward.

have you traded this system lately? It has done very well for me so far. Do you have any other segestion on how to make it any better?
thanks,
PW

I haven't traded this one for some time now. I'm glad it worked for you well, it should.

Hm, it is quite a task to suggest something about it. I will keep this in mind. I have no decent solution to offer yet, may be my team has; and, of course, it would be great to hear any suggestions from our web users!

Regards,
Edward.

Does it matter if the RSI is POINTING up or down? Or is the value the only relevant thing to consider?

Only the value here is a signaling factor.

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