Forex trading strategy #1 (Simple balanced system)

Hi Edward,

I would like to know, for example

1) EMA cross for a buy, but RSI is below 50 and Stoch is below 80, we wait for RSI to go above 50 and enter right?

2) EMA cross for a buy, but RSI is below 50 and Stoch is above 80, do we still wait for RSI to go above 50 and enter?

We need both Stoch lines in oversold/overbought region, to consider it oversold/overbought, sorry for the repetition.

Regards,
Edward

1) correct, once RSI goes above 50 - enter Long.
2) RSI should go above 50 again, but since Stoch is in overbought we have to pause and wait till Stoch exits an overbought area - at that moment we'll be witnessing a correction in price as it'll retrace lower - then once Stoch lines again cross upward outside an overbought area (normally this cross will happen around 50 level of Stoch) + if EMA alignment is still valid + RSI is still above 50 - we enter Long.

Best regards,
Edward

Hi Edward,

i am confused about the parameter for RSI(14,70,30). the 70 and 30, what is it for?

Hi,

that should be simply RSI 14.
30 and 70 are the horizontal levels/lines you draw to mark overbought/oversold levels.

Best regards,
Edward

Hi Edward,
Thanks for your reply on my questions, this is a good strategy, simple and effective.

I would like to know what tools you used to determine your stop loss or how many pips you set on stop loss.

I have two loss due to stop loss of 50 pips, which I think is too tight, got hit and market go back to the correct direction..

Any guide on this?

Thanks
Raymond.

Hi Raymond,

have you tried CCI based exit, where you basically start with Parabolic SAR and then switch to a trailing stop.

Another idea would be to use Heiken-ashi candles, either regular or smoothed.
I think I'd just link to this page and there are both indicators and explanations to them: Heiken-ashi based stops

Best regards,
Edward

Hi Edward,

Has anyone been able to develop and EA for this system?

Thanks
Andrew