Getting Started
This trading strategy relies heavily on catching the trend. You may have success using this strategy on as low as the one hour chart or as high as the daily chart; however, I’ve had most success trading it on the four-hour chart. This strategy
consists of four indicators, which are:
- 5 Period Exponential Moving Average (closed)
- 15 Period Exponential Moving Average (closed)
- 50 Period Exponential Moving Average (closed)
- Stochastic indicator K=13 D=5 Smooth=5 (13,5,5) 80/20 Levels
Refer to the picture above to see how your chart should look
How to Trade
There are only two, yet very important rules to follow when
trading this strategy.
- The K% line on the stochastic indicator MUST be above the D% line when taking a BUY & the K% line MUST be below the D% line when taking a SELL. Refer to the picture above to see how your chart should look
- Both the 5 & 15 EMA MUST cross the 50 EMA going upwards to create a BUY signal OR downwards for a SELL
signal.
Let’s take a look at some examples:
In this example, we can see the K% is above the D% (as shown by the bottom green arrow). We can also see the 5 & 15 EMAhave crossed the 50 EMA (as indicated by the upper green arrow). Once both the 5 & 15 EMA’s have crossed the 50 EMAgoing upwards, we would have taken a BUY.
Next example:
In this example, we can see the K% is below D% (as shown by the bottom red arrow). We can also see the 5 & 15 EMAhave crossed the 50 EMA (as indicated by the upper red arrow). Once both the 5 & 15 EMA’s have crossed the 50 EMA going
downwards we would have taken a SELL.
As you can see, in both of these examples, we would have caught the trend and made some major pips!
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Hey don’t you have a MT5 indicator to trade Synthetics please
Probably the best strategy on this site.
hey, what’s the TP or exit criteria?
also what would be the SL?
thank you!!
most recent swing high or low right after entry signal, if the swing high or low is to far away use the 50 period EMA, if neither is possible ATR, TP would be 1.5 times whatever SL you use, I use a similar strategy