Forex trading strategy #1 (Simple balanced system)
Submitted by Edward Revy on February 28, 2007 - 14:49.
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)
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.
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Hi Niyi,
Taking half of the position using a trailing stop would be the right thing to do.
Letting the other half run until exit rules are met.
Regards,
Edward
I coded a strategy based on this approach and run it through dukascopy's backtester - nice results. I trail a stop on this but it's a quite a way back and really just a safety harness as the opposite position will trigger the close.
I also added bollinger bands to the mix for a breakout signal and making sure the gap is above 2.5 makes a good test. Added another couple of bit's and pieces but essentially staying with the main strategy.
Based on 280 trades - got one looser which was over the Chinese new year. That was going from the beginning of the 2009 to now... I also based my signals on 1minute bars on the close.
To add to this all the positions were long as I limited the opening. From what I could see using the opposite signal to close the position wasn't the best solution, I just let it close on a trailing stop. I want to test various exit strats with this.
Good results, well done.
I appreciate your feedback on this strategy!
Thank you and happy trading!
Edward
hi Edward,
tks for a great site.
This strategy has been quite good 4me on demo.But i wonder if i am getting too conservative when I added my version- only long when price action is above 100EMA n only short when below 100Ema.
i see that u normally advise trading with the main trend but 4 this strategy u dont suggest that rule.why exception to this rule for this stragety?
i am testing it more n surely will post my results.
tks again.
miraclegirl
where has my messag gone?
All messages wait to be reviewed before being published. Thank you.
Thomas
Hi Miraclegirl,
This strategy already got lots of "ifs", so I decided to keep it simple, besides it works well as is.
However, I always encourage traders to run own tests and improve trading rules. We all have good ideas, sometimes brilliant ideas which we shouldn't be afraid to use.
Best regards,
Edward
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