Forex trading strategy #6 ("Key Simplicity")
Submitted by Edward Revy on February 28, 2007 - 15:49.
Yes, one look - one hit. A trader can decide on his/her trading plans by a simple 1 second glance at the chart. It is a very simple Forex trading system that is a pleasure to use for traders with a busy schedule.
Time frame: 1 day
Indicators: 5 EMA, 12 EMA, RSI 21
Entry rules: Buy when 5 EMA crosses up and over 12 EMA and RSI is above 50. Sell when 5 EMA crosses down and below 12 EMA and RSI is below 50.
Exit rules: exit when 5 and 12 EMA cross again or when RSI crosses back through 50.
Since it is a daily system the logic behind it can be described as simply following the daily trend. Because EMAs are lagging indicators they actually help us in this case. The signaling EMAs' cross appears after a good pause which is just enough for the new trend (if any) to be established.