Forex trading strategy #1 (Fast moving averages crossover)

You can tell that the currency is trending sideways when you look at its history , and check where you are now compare to the past . If you above - the currency pair is trending up . if moreor less the same as before then its trending sideways.

personally me , i use the fx tech analysis for telling me the market trend direction and if its moving sideways

THIS STRATGY FAILS IN SIDEWAYS MOVEMENT

The strategy will fail only when there is a truly narrow range which allows Moving averages to cross multiple times. You should be able to see this range far ahead and disregard MA crosses till price breaks out of the range.
Another trouble this strategy can encounter is quickly changing trends - a wide and violent sideways channel. In such cases it is better to switch to a higher time frame while on the smaller one use use RSI or Stochastic or CCI to anticipate tops and bottoms.

Regards,
Edward

Hi Edward,

Where shall I place the STOP LOSS?

Thanks.

Buddy.

I like to use previous swing high/low to set my initial stop.
You can add Bill Williams fractals indicator to help you with tops and bottoms.

Here is a SL method:

we use the latest swing high/low which is on the other side of our EMA cross (See initial stop loss levels on the screen shot below).

The next thing we need is a swing/fractal on the opposite side of EMA cross (highlighted as the "checkpoint").
We should not move our initial stop loss till we see the "checkpoint" level being surpassed by the price. Once the checkpoint is passed, move SL to the latest fractal. Repeat the steps.

Best regards,
Edward

Thank you, everyone!
Comments for this strategy are now closed. To continue discussion, please use our Forex Forum, where you can create a new discussion topic.