Forex trading strategy #5 (5x5 Simple system)

Hi Lynn,

I'll look at weekly setup and most important, test it. First results will come probably next month.

Regards,
Edward

Hi Edward,

Thanks for this website. Very helpful and I like this strategy particularly.
My q is where do you recommend to take profit?

Thanks,
Fitri

Hi, Edward:

Thanks for the clarification. Also, I know you stated in an earlier posting that you WOULD NOT recommend this strategy for shorter timeframes. Would you recommend it for longer timeframes (i.e., Weekly)? If so, what adjustments would you make to strategy for the Weekly Timeframe? Thanks, Lynn

Yes, go with a market order.

Regards,
Edward

Thanks for the quick response, Edward. One more question: after the 10 extra pips have been made and there is RSI confirmation, do you recommend placing a market order? Thanks, Lynn

Lynn,
No problem, I'm happy to answer all you questions!
The next day (after 5 SMA fact) once 10 extra pips are made and RSI isn't ready yet, we need to wait for it to provide confirmation. In this case (when RSI "is late") we do need a following candle to close before we enter the market to avoid fake outs, which means we will wait yet another day before we can enter.
Only when RSI confirmation is "on time" (e.g. RSI was in required position before 5 SMA cross or RSI changed to a required position simultaneously with the candle that crosses 5 SMA and closes on the other side) we enter the next day right after 10 extra pips are there.
Regards,
Edward

Edward,

I apologize! I said just one more question, but another pop into my mind as I was reading charts today. If a candle crosses the 5 SMA and closes on the other side of it, but the RSI DOES NOT provide confirmation, should we enter the market during the next day once 10 extra pips are achieved AND the RSI provides confirmation (that is, before the candle closes) or should we wait until the following trading day? Thanks, Lynn

Hi Lynn,
Thank you for your question.
The price should make 10 extra pips not from 5 SMA and not from the previous close actually, but rather from the previously registered daily High or Low.
After that we look for confirmation from RSI.

Regards,
Edward

Hi Edward:

You made this comment on December 10, 2007: "Yes, it means that each candle represents 1 day.
A first daily candle that crosses 5 SMA and closes on the other side of it, is only a signaling candle. Out entry is always going to be next day when we get price making 10 extra pips above (for buy order) / below (sell) the signaling candle." Is that the price making 10 extra pips from the previous close or 10 extra pips from the previous 5 SMA? Thanks, Lynn

Hi Egudu,

you don't have to sit and wait. Use Buy Stop and Sell Stop orders instead.
There is no specific time defined to make those 10 pips happen.

Regards,
Edward

Hi,
thanks for this method, but i need help here,how long should someone wait for the extra 10pips to open a position, cos it seems sometimes it takes up to 3-4hrs,would someone wait that long or is there a specific time for the 10pips to be made for the signal to be valid.
Egudu.

It is an exponential smoothing.

Regards,
Edward

Hello,

Which RSI do you use, exponential smoothing or Wilder smoothing?

Regards

Yes, it means that each candle represents 1 day.
A first daily candle that crosses 5 SMA and closes on the other side of it, is only a signaling candle. Out entry is always going to be next day when we get price making 10 extra pips above (for buy order) / below (sell) the signaling candle.

Regards,
Edward.

Time frame one day? Does it mean that each candle represents a day?

If it represents a day:

You said buy when price crosses over 5 SMA and makes + 10 pips up and then you said,

Always remember to take actions/enter the trade only after the signaling candle is closed.

So should we enter after 10 pips or should we wait for the day to finish.

Thanks.