Forex trading strategy #3 (EUR/USD simple system)

ohhhhhhh the MACD is about to cross, here we go again..... gulp lol

thanks for the great site!

sold @ 4:06 PST
Bought @ 8:40 PST
41 pips

Buy signal a few minutes at 8:45PST
Trade is in the green by 18 pips.

ok done posting my trade updates but this system works.

there was 2x i wanted to get out of the position but the reason i sold to begin with did not change so i stayed in and i closed up.

If i would have got out and in again i would have a serious case of whip lash.

Performing Forex trading, is it necessary to monitor the screen every hour/30min? Please advise.

Rgds,
forex newbie

Hi,

if you trade on 30 min charts, every 30 min there will be a new market data on your screen, so you could actually monitor it every half an hour, but it's not a requirement. If you have Stops and Take profits orders set for your Trades, you may not need to come back every 30 min; instead, by the end of the day you can simply review your results: with some trades already closed and some still running.

Good luck!
Edward

Hello Edward,
Thanks so much for posting this strategy, I have applied it to my demo account and have found success with it. I am not sure about one thing. I notice that the Parabolic SAR sometimes switches sides right in the middle of a session other times right in the beginning of a session. Either way I want to make sure that I understand what you wrote to Neeta. If I'm looking at the chart and both signals are pointing in the same direction to buy or sell during the entire session I should just wait until the next candle and enter at the beginning? It seems that if I did this I would miss a lot of pips on some trades. Or should I just wait for the Parabolic SAR to switch even in the middle of the candle session and then immediately enter? I would really appreciate an answer. Thank you so much again.
Joe

Hi Joe,

I think I understood your question, but if not, please feel free to re-submit.

If a Parabolic SAR changes direction on a current candle and that candle is still not closed, we cannot enter a trade. Why? Because by reacting too soon we will deliberately accept an additional risk - a candle that is not fully formed(closed) can continue to develop/grow in either direction causing the Parabolic SAR to flip back and forth several times.
We don't want to reset our trades several times on the same candle, that's why we wait for that first signaling candle to close (which often costs us some pips), but that's ok, because in return we have a stronger/confirmed signal to trade upon.

Kind regards,
Edward

Hi Edward,
Thanks for the answer, yes you understood my question well. I assume that the same holds true for the MACD indicator, am I right? Another question, is it possible that so many traders use this system that it would stop being effective. This has really been working for me I wonder if it will continue working for me in the future. Thank you in advance for your answers. All the best.
Joe

Hi Joe,

Correct, the same rule applies for MACD: upon getting the first signal from MACD we have to make sure the candle where the signal has occurred is closed.

There are millions of strategies used by traders, so it's very unlikely that any particular strategy would dominate the market. But even if we assume such possibility, for every developing trend [when many start using the same signals], there is very soon a new counter-trend born, so the balance is always present.

Kind regards,
Edward