Forex trading strategy #3 (EUR/USD simple system)
Submitted by Edward Revy on February 28, 2007 - 15:13.
As we move forward we discover a strategy that fits only chosen currency pairs.
Take a look at the next Forex trading system:
Currency pair: EUR/USD.
Time frame: 30 min.
Indicators: MACD (12, 26, 9), Parabolic SAR default settings (0.02, 0.2)
Entry rules: When Parabolic SAR gives buy signal and MACD lines crossed upwards – buy.
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Hi Edward. Thanks for the great info. I have one question I would appreciate your feedback on. If you were in a trade that had been closed out in profit and the market retraced to your original entry position: If the signals were all still valid would you re-enter the trade?
Regards
Lloyd
Hi Lloyd,
yes I would, but only if that was the very first retracement since my original entry.
Best regards,
Edward
Hi Edward,
First off, I have had 3 successful trades in a row using this system! What do you think of entering on 30 min charts and exiting based off of 15 min charts? That way you know for a fact that a new trend is forming when entering, but you will be able to preserve pips when waiting for the signals to say exit on the 15 min chart. Also, what do you think would be another good indicator to add to this system? I have found it good to wait until the market reaches a support or resistance line and then wait for the signals to show buy/sell to make it a higher probability of having a positive trade.
Chad
Hi Chad,
thank you for your feedback.
Exiting on 15 min chart is not a bad idea; if you're comfortable with taking profits that way - do it.
I have so far no additional ideas about adding new indicators to this particular system, I think, as you said, working with S/R levels could give you an extra edge.
But, on the other hand, see if you like this MT4 indicator for entry confirmation:
wellxAMA.mq4.
The color of the dot will show you a trend in which to trade with SAR signals. Whenever a dot is missing - it is an indication of a range ahead, however, as long as you have no new color dots, stick to the previous trend.
At this stage, when you're comfortable with the general idea of using the system, you can experiment with it, mount new tools etc - that's my favorite part of any strategy I work with.
Happy trading!
Edward
Hi Edward,
Thanks for the quick reply! I don't know if you answered this already but if you did I am sorry. Would this strategy work on the hourly chart? I am planning on entering on 1 hr and using 45-50 pip stop losses to try and catch those 100+ pip moves so that way I can pyramid and bring in loads of cash. What is your input on this?
Yes, it should work on 1 hour.
For a better result, the profit goal should be inline with average daily range every currency pair is able to produce.
Check out those approximate numbers in order to give your currency pair a fair chance to reach the goal (if set for 1 day): Forex currency trading range.
Also, if you trade on MT4, you can download and use the following custom indicator, which will suggest on the profit targets reasonable for every day.
Daily_Range_Calculator.mq4
Happy trading!
Edward
Do you know how to create a custom EA for Metatrader 4 so that I can get an SMS text alert when the MACD crosses above/below 0 and the Parabolic SAR gives a buy/sell signal so that I do not have to wait at my computer all day?
No, sorry, I don't.
Try these links:
http://www.forex-tsd.com/46758-post1.html
Kind regards,
Edward
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