EUR/USD simple system
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.
When Parabolic SAR gives sell signal and MACD lines crossed downwards – sell.
Exit rules: exit at the next MACD lines crossover or if the market starts trading sideways for some time.
Happy Forex trading!
HI ALL,i like simple systems.breakout of trend line is suitable for scalping.here is my scalping technique with small stoploss.your stoploss at zigzag low point.zipfile including indicator and template.you need to draw trend line.it is excellent at the m30,h1,h4,d1 time frames.as usually exit depends on your wish.i cant say it because i too can not do it goodthank you
The RSI trading indicator is a price momentum measure that also uses overbought and oversold zones to show when markets may be overextended. It makes up many trading methods and we are going to use it with our 5×5 RSI Trading System. RSI = Relative Strength Index The RSI, although referred to as “index” is not really an index so the name is a little misleading. Just think of the RSI indicator as an oscillator that measures momentum over a set period (look back period) and will indicate when the momentum has pushed price to far in one direction (oversold/overbought). Oversold And Overbought Oversold is a term that is used when price is deemed to have fallen a certain distance away from the average price. This is a condition that is measured by the RSI dipping below level 30 on the indicator and is used in conjunction with a trading setup, usually a buy signal. Overbought is the opposite of oversold. When price has risen a distance from the average price, it can be deemed to be overbought and the RSI will be above the 70 level. Depending on the trading system, when the RSI is above the 70 level, the strength of price is considered to have been strong and a reversion is expected. This will set up a sell signal for most RSI trading systems. What Does “5X5” Stand For? Quite simply, it makes up the settings for the two trading indicators that will be used in the strategy: 5 period lookback setting for RSI – We will use levels 30,50,70. 5 period simple moving average (SMA) Other initial details about the trading strategy: Time Period – Any time frame can be used including short term for day trading or longer term charts for a swing trading approach with the 5X5 RSI trading system. Currency Pairs – You can use any Forex pair you like however keep spread costs in mind if considering trading the exotic currencies. How To Trade The 5X5 RSI Trading System – Forex Example Here are a few notes before you get to the rules of the Forex trading system: the 5 SMA Indicator is for determining trend direction if the price is is above the 5 sma, it is deemed an uptrend or downtrend if price is below the 5sma. the RSI is used as a confirmation Here is a sample buy signal RSI TRADING SYSTEM – BUY SIGNAL SETUP Buying Rules: Price closes above the 5 period SMA and is an obvious bullish candlestick RSI is above the 50 level. If this is the first cross over after a downtrend, that’s even better. Place a buy stop above the bull candle Place your stop loss about 5 pips below the low of the candlestick depending how your risk parameters. You can set profit targets, trail stop once price moves in your favor. Many ways to take profits. The sell signal is opposite that of the buy set up just discussed. RSI trading method short trades Sell Signal Rules: Price closes below the 5 period SMA and is an obvious bearish candlestick RSI is below the 50 level. If this is the first cross over after an uptrend, that’s even better. Place a sell stop below the bear candle Place your stop loss about 5 pips above the high of the candlestick depending how your risk parameters. You can set profit targets, trail stop once price moves in your favor. Many ways to take profits. Using RSI To Trade – Important Points About This System Remember that the RSI is a trading indicator, will lag price, and although objective, price action trading can help improve this system. Using price movement, especially how strong the candlestick closes, can bump up the edge you can have. You want to see strong closes or, as shown in the sell signal at #1, using price patterns such as inside bars and break from compression can help improve the system. If you chose to take more trades after the original trend change trade, you may want to see that the RSI indicator has dipped into oversold or overbought territory. This often times will set up a pullback in the price that can aid in triggering another trade depending on how deep price moves. Use stop orders for your entries as this will show that at least in the short term, momentum is in your favor. There may be times that the candlestick that gives the buy or sell signal is quite large. Either reduce position size or wait until there is a pause or retrace in price. There will be times that the RSI flips back and forth over the 50 line. This indicates choppy price action and you may want to highlight that price action with lines to show a pattern break. RSI AND CHOPPY PRICE ACTION Regardless of the time period you trade, you will run into issues such as price action that indicates chop. You do not want to implement this strategy during those times. Use standard price patterns to contain price movement and wait for the break of the price pattern to occur. Once the break occurs, return back to the rules for the RSI trading system
There are a lot of misconceptions around about forex trading. Most people hear mention of the word ‘trading, ’ and they assume that it must be very complex. In fact, you participate in the forex market every time that you convert money into a foreign currency for a holiday. The term is an abbreviation for the ‘foreign exchange’ market. Consequently, it is something which has a direct impact on life whether you’re a day trader or a soccer mom. Forex is the gentle giant of the financial world. It isn’t as loud or lively as stocks and bonds, but it is substantially larger than all other capital markets. Despite operating on such a huge scale, the basic concepts are simple and accessible to any kind of investor. The Purpose of Trading Strategies Successful forex trading is all about discipline and patience. You have no personal control over financial conditions, but you can stay vigilant and learn how to spot the signs of a big opportunity. Trading strategies help to create this discipline because they form a series of guidelines which point investors in the right direction. They also work to identify and formalize trading goals, which are very important. You need to know why you’re making a particular trade and, ideally, have the technical and fundamental analyses to back it up. The same applies to your choice of currency trading pair. Don’t forget that major trading pairs are usually more liquid and have narrower spreads than less common currency options. There are all kinds of different methods to choose from, but the best forex trading strategy is one which enables you to carefully manage your funds. Most traders who like, to begin with, small steps and little risks. They build up to bigger trades over time, but generally stick to small-scale activities which deliver modest amounts, but on a regular basis. It is important to remember that no trading strategy is infallible. If you’re not prepared to tolerate losses, you probably shouldn’t be trading at all, because this game is all about calculated risk. The secret to long-term success is to observe and learn from your early mistakes. Also, set realistic targets, particularly when you are just starting out. Before committing to any new trading action, identify target take profits and stop losses. Five Common Forex Trading Strategies Day Trading Day trading is probably the most widely used forex trading strategy. It is sometimes called ‘spot trading’ or ‘active trading.’ It involves purchasing and offloading currencies within a very short window of time (as is suggested, within a day). Positions have to be taken and closed in the same twenty-four hour period. Positions cannot be carried over into a new trading day. The strategy is highly effective, but it tends to be better suited to those with a little experience. On the other hand, technology is speeding up the process and making decisions much more straightforward. So, it could be argued that day trading is a good choice for amateurs who are working electronically. Keep in mind that you could be subject to a penalty charge if try to carry a trade over into the next day. Scalping Like day trading, scalping is a fast pace forex trading strategy. Investors hold their positions for brief windows, sometimes as small as a minute long. The aim is to focus on modest gains at a consistent, regular pace. It means that even though individual profits are lower, there is a lot of money to be made from how regularly they develop. Scalpers try to avoid giving too much attention to any one position. Therefore, the downside to this strategy is that it requires a lot of time and effort. You’ve got to be fully dedicated to following the method through to completion. This involves keeping a very close watch on market fluctuations and price changes throughout the day. For this reason, it is not the optimal choice for part time traders. Trend Following This is another very popular method of forex trading, and it is remarkably simple. It has the potential to generate a lot of profit, but it should be limited to long-term activities. Trend following suits patient, disciplined personalities who prefer to be rigorously guided throughout purchasing decisions. Essentially, you’re watching the progress of a currency trend. You must be able to identify this trend using your previous evaluation of currency patterns and price actions, in relation to changing economic conditions. Make good use of resources like entry and exit points, moving averages, bar charts, and candlestick patterns. Trend followers try to minimize short-term instability and prioritize long-term price undercurrents. Range Trading The range trading method is all about the notion that, no matter what direction a currency pair moves in, it will eventually come back to where it started. This allows traders to make decisions based on the probability of prices trading at the same levels on multiple occasions. The aim is to maximize the value of a trade by taking advantage of price fluctuations more than once. The first stage of this forex trading strategy is calculating the resistance and support lines. Once identified, they can be used to pinpoint the best opportunities to make a profit. Range traders exploit scenarios in which currencies trade inside the resistance and support lines for an extended window. This is achieved by picking long positions at the bottom of the range and short ones at the top. Swing Trading Swing traders are, in many ways, the same as range traders. Certainly, the two strategies are closely connected. It involves exploiting levels of market indecision, but it also focuses on the resistance and support lines, as range trading does. The goal is to highlight brief patterns. The trader then sticks with them right up until the point at which the move ends. The big benefit of swing trading is that it can be used in conjunction with trend following and day trading. However, to make it work, you must be able to accurately locate short term ranges and trends. Selecting the Right Forex Trading Strategy These are just a handful of the forex trading strategies used by both amateur and experienced investors. Ultimately, only you can determine which method works best. It will depend on your lifestyle, how many hours you want to spend monitoring currency activities, how much profit you are trying to make, and whether you’re willing to tolerate big risks. Don’t forget that you can combine different strategies to create a more personalized approach.