Forex trading strategy #9 (Teodosi's Moving Averages tunnel)

This is a very weird strategy. I've been testing it for days and it doesn't work without a decent exit strategy.

You could look at the EMAs crossing, but that will result in a lot of missed profits (happens a lot). An option is to use the Bill Williams Fractals, but that won't work all the time. If the trend changes and you are waiting for the opposite fractal arrow, you're already in terrible loss.

My only conclusion: Riding a positive trade will bring in lots of profits, riding a negative trade will loose you less money than a positive trade.

That being said, this strategy is only for those with enough equity.

I don't think this is a strategy for beginners. Just my 2 cents.

Hi Dave
Usually EUR/AUD or EUR/USD, sometimes EUR/JPY. I always use the hourly TF. BUT I check if its in line with the daily. If the daily is going south and the hourly is going north, I pass even if the hourly Teodosi's MAs tunnel look beautiful :) BTW, I always trade Asia and Euro sessions. Only occasionally do I trade the US session. I'm in Asia and at night, I wanna relax, not look at charts :) I trade the US session only when I'm feeling hyper and can't sleep. Thankfully, not that often. LOL.

@Wong

Thanks for sharing your experience. On what pair do you use this strategy, and on what timeframe?

Dave

Hi User
I don't usually follow the exit strategy spelt out by Teodosi. Unless I have time to monitor the trade. Otherwise, I switch to daily and set a target (and stop loss). On the rare occasion when I do have time to monitor, then yeah, I wait for the signal to exit. But I think I only did that once or twice and so far back, I can't remember which trade and can't provide a pix. Sorry!

And yes, I agree that this strategy is working really well. Very grateful thanks to Teodosi and Edward for sharing this strategy.

Cheers
Wong

Dear Wong,

thank you for noticing, I totally messed it up.
It's been corrected now, and yes, you're 100% correct saying:
"I thought for long, both 5 and 12 should be above the red lines (18 & 28 EMA) but if 5 crosses above 12 going upwards then its stronger trend. And similarly for short, 5 and 12 should be below the red lines and if 5 crosses 12 going downward, the signal is stronger"

Best regards,
Edward

This strategy seems to be working well.

I would need an example for an exit strategy..
Can anyone show their exit strategy (pref with picture)? Much obliged! :)

Edward
Sorry, I did not see that you had replied to Verna so I jumped in. Now I am reading your reply and it is confusing me a little.... You said that when 5 is above 12, we go long and when 5 is below 12, we go short. Pardon me, I thought for long, both 5 and 12 should be above the red lines (18 & 28 EMA) but if 5 crosses above 12 going upwards then its stronger trend. And similarly for short, 5 and 12 should be below the red lines and if 5 crosses 12 going downward, the signal is stronger? Hope you can clarify this, Edward.

Wong

Liking this strategy so far!

I'm always scared to keep the profit open, but I'm sticking to the WMA crossing as an exit point.

Hi Verna, I was hoping the guru would reply to you. Since he is busy, let me just say that from my own exp, I feel that the 5 above the 12 and vice-versa for short is best. Just seems to give better direction.

This is a really great strategy, isn't it?

Wong

Hi Mahesh,

Where can we find info on your strategy? Love the strategy, but I need entry/exit signs..

Dave

hi,
my stratergy sound same,
i use alligator 9,18,45
trade with same view.u can understand easily,but u make more profit if u use my stratergy for entry and ur for exit as i feel personally.
thanks for giving such an idea for early exit!!
mahesh dholariya
surat,india

Hi Verna,

For 18 and 28 EMA in the red tunnel - the position doesn't matter.
For 5 and 12 WMA - it does matter - what matters is that both WMAs should cross the 18 & 28EMA tunnel.

Regards,
Edward

The EMAs above/below the WMAs depending on direction. Does it matter which EMA is above - i mean, does it make a difference if 5 is above 12 or vice-versa, or is it okay as long as both are above the red tunnel for up direction?

Verna

Edward
Pardon me for another comment. But its only to say that I found the WMA on TOS. The others are listed under MAs but this one is listed as WMA so I didn't find it the first time round! Sorry for having troubled you.

Incidentally, this is only my observation of my first day trying this system. But I've put it a couple of trades. I find that those I set the TP and SL with the fractal is more successful than those using the Daily Avg Range. Because a big candle gets my trade stopped out before it reverses. With the fractal, the profit is smaller but more likely to reach. But I may be wrong as only 1 day and maybe too soon to tell.

Thank you, Edward.

Thank you, Wong

in that case, yes you can use SMA instead of WMA, that would be the closest one.

Kind regards & happy trading,
Edward