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Forex trading strategy #2 (Slow moving averages crossover)

Current strategy applies the same principles as Strategy #1.

Use time frame and currency which respond the best (1 hour, 1 day… or any other).
Indicators: (multiple of 7) 7 SMA, 14 SMA, 21 SMA.

Entry rules: When 7 SMA goes through 14 and continues through 21, BUY/SELL in the direction of 7 SMA once price gets through 21 SMA.

Exit rules: exit when 7 SMA goes back and touches 21 SMA.


Advantages: again it is an easy set up and does not require any calculations or other studies. Can produce very good results during strong market moves, the system also can be easily programmed and traded automatically.

Disadvantages: System requires periodical monitoring according to a chosen time frame. SMA indicator signal can be confirmed after the current price bar has been fully formed and closed. In other words, when SMA stops changing and the signal is fixed, traders may rely on such information to open a trade.

SMA Means Smooth Moving Average or Simple Moving Average?

Thank you very much.

SMA stends for simple moving average.

You are welcome,

SMA means simple moving averange and its also fast

From the graph i think SMA's take long to indicate imediate rise and fall of price and you are prone to losing small pips before the graph shows. In simple i don't think fast


I tried this with MACD to double confirm... this morning I when 1-2 hour after tokyo market open i bought the AUD/USD after just 30 min it raise 20+ pips... But i dunno when to take profit...

You may exit using rules given in the strategy: when 7 SMA touches 21 SMA.

Or exit whenever you feel that profit is right to keep.

Another option would be: after +20 pips you may try moving a stop loss to break even and allow a trade to run freely; and once 7 SMA crosses 14(!) SMA exit a trade.



Is there any indicator we could use with this strategy to get another confirmation which could help us avoid fake signals.

To confirm a signal try using, for example, Parabolic Sar indicator with settings (0.1, 0.01) or possibly (0.1, 0.005) depending on a currency pair you choose to trade with - just test which one performs better.

Your further comments are welcome!