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Forex trading strategy #1 (Simple balanced system)

Current Forex trading system represents a well thought and very simple combination of indicators. Knowing what signal to look for with each indicator, provides a strong tip for good entries and exits.

Time frame: Any.
Currency: Any.
Indicators: 5 EMA, 10 EMA, Stochastic (14, 3, 3), RSI (14, 70, 30)

EA: SimpleBalanced_1_0.mq4

Entry rules: Buy when 5 EMA crosses above 10 EMA and Stochastic lines are heading north (up) and Stochastic is not in overbought position (above 80.00 level) and RSI is above 50.

Entry rules: Sell when 5 EMA crosses below 10 EMA and Stochastic lines are heading south (down) and Stochastic is not in oversold position (below 20.00 level), and RSI is below 50.
Exit rules: when 5 EMA and 10 EMA cross in the opposite direction or if RSI crosses the 50 mark again.

FOREX TRADING SYSTEM


Advantages: allows filtering entries and thus is more accurate.
Disadvantages: 5 and 10 EMAs can give very early exit signals.



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


This strategy works well, IF you are patient to wait for the RSI to get above or below 50 and the EMA to actually cross. Almost without fail, whenever I've tried to 'get ahead' of these indicators by 'anticpating' that they were going to line up-the trade failed. Best to wait until the indicators are just as suggested.
Happy Trading.

Hi Edward

Please clarify this. The entry rules for both the buy and sell trades in the above strategy have the following "and Stochastic is not in the overbought position (above the 80.00 level)". Thank You.

It should say "oversold" for Sell orders... It's been fixed.
Thank you for pointing that out.

Regards,
Edward.

hello Edward.

i'm Jorge Cano and i'am from Colombia, therefore my english are not better language, but i will try to do my question of the better way possible.

Is necessary that in the moment that Emas Cross, Stochastic and RSI are in the levels indicated? or if they aren't, i can wait some candles more until these indicarts are in the correct level to enter in the trade?

Thanks for this web page. Are the best that i found of Forex in Internet.

Hello Jorge,

There is no requirement for EMAs, RSI and Stochastic to signal simultaneously. There could be (and often is) a delay before all indicators provide signals we need.
If we have EMAs' cross, but Stochastic and RSI are not in the levels indicated, then we simply wait till they reach those levels. Once all conditions are met, we can start trading.

Regards,
Edward.

I'm Jorge Cano again.

Anyone know which is the percentage of efectivity of this strategy?

Hi Edward,
My name is kemi.I am a beginner. I want to put forward my system for testing and know how efficient it is. I use ema crossover of 5(close) and 6(open) and 20SMA on a 1hr chart.
Entry rule
Buy: 5 Ema crossover with 6 ema with the 20SMA/trend channel supporting the direction combined with the above RSI and schostatics parameters in the balanced strategy above.
Sell: This is the vice-versa of the above.
However I exit using the Fib.expansion tool or crossover in the opposite direction from the decision taken.
Thanks.

Hi Kemi,
Thank you for your input in our discussion.
I like your idea of adding 20 SMA to support the channel. This should allow filtering some losing trades and add confidence in entering valid ones. Exiting with Fibonacci also adds value to the strategy.

Is there anything you may be concerned about regarding the strategy. Let us know and we will do our best to answer your questions.

Regards,
Edward

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