Forex trading strategy #1 (Simple balanced system)

No, thanks.

Hi Edward,
i want to know if i can rely on this system for EUR/USD on 15 timeframe. Will that be reasonable?
seun akin

Hi seun akin,

Absolutely. It should perform well on 15 min EUR/USD.

Regards,
Edward

hello edward,
I don't have to mention again how kindly person you are sharing your trading strategys with us!
In this strategy you mentioned above, I like to know how and where to put the stoploss and where to put the take profit.
and what about money management ?

Hi,

I would be glad to answer with a straight forward solution, such as:
TF 1 day, pair EUR/USD, SL 50 pips, TP 80 pips
TF 4 hour, pair EUR/USD SL... etc etc...

:) but that would require months of analysis of majority of time frames and currency pairs... which is, well, possible, but not for my schedule :)

Thus, here is a general solution/answer I can provide:
Certainly, position of a stop loss order would depend on a time frame and a currency pair you choose. In general, for 5 min trading it would be reasonable to set a fixed stop of around 10-20 pips, for hourly - somewhere around 25-40 pips. The more volatile the pair, and the higher the time frame, the wider should be the stop.

But still the best place for a stop is always found after analysing nearby support/resistance levels such as trend lines, pivots, fibonacci levels etc.
If nothing obvious comes out, then the simplest way to determine a place for the stop is to look at the most recent swing high/swing low (see the illustration about swings in the comments at http://forex-strategies-revealed.com/advanced/trendlines-breakout/cpage-...) and set a stop order couple of pips away from it plus counting in the spread as well.

With this Forex strategy we take profits using exit rules. However, if you decide to have a predetermined profit target, then again you would need to look for obvious price support/resistance levels mentioned earlier; or come up with a fixed amount of pips you believe is reasonable for the time frame and pair you trade.

Money management rules here would generally be about knowing the risks: before each entry we calculate the distance at which to set a stop, then enter only if risks aren't too high.
As to position sizing and number of lots to be traded - these parameters are fundamental and set individually, apart from the main system rules.

Kind regards,
Edward

Hi Everybody, greetings from Bogotá DC, Colombia.

I see this system profitable. I have been testing this system, but sometimes I fail because I only see the 15 minutes chart, and trade following the instructions.

I do not say that follow instructions makes you fail, I want to tell you that you must follow strictly the instructions about entry and exit market with the system, but in order to reduce losses, you must look other timeframes before you open a position.

My question is, which timeframes must I watch before open a position, using this system? I open positions in 15 min. timeframe. I think watch 1 hour and 4 hours timeframe could help, but I would like to share opinions.

Finally, I made a modification to this system. I use 2 Moving Averages, 5 EMA close, and 8 EMA open. These EMA gives you a little bit earlier entries. The other indicators remains as is.

Thank you in advance, and happy trading.

CARLOS ALBERTO CASTILLO SANCHEZ.
Bogotá, Colombia.

Hi Carlos,

Thank you for the good idea about MAs.
As to higher time frames, I'd use either 4 hour and daily OR, as you said, 1 hour and 4 hour. And then simply compare the results.

Regards,
Edward

why do we need an rsi of (17,70,30) ? arn't those just redundant, and I'm a noob here can comeone explain what the (14,3,3) is on the stoch