This forex strategy is extremely accurate. Simplicity is key here. Trend identification is done by one of the most used forex indicator- RSI (Relative strength index), which is also used for entry timing (different settings applied).
Timeframe on chart: 1 Hour
Forex strategy can be used on: EURUSD, GBPUSD or any other currency pair with reasonable spread.
Forex indicators: Fast RSI (Relative strength index) with period 2, placed over slower RSI (period 12). For best visibility and function apply both indicators in one MT4 window under you currency chart.
Make sure to distinguish two indicators in the window. Make it neat and readable. In default, RSI indicator comes with two marked lines – 70 and 30. Add another two with value 55 and 45.
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Entry into the position:
Buy (Long) position:
RSI indicator with period 12 is above 45 - 55 zone. Uptrend is in progress.
RSI with period 2 is under 30 line. Thus marking lower price in overall uptrend – meaning better price for position entry.
Sell (Short) position:
RSI indicator with period 12, is under 45 line. Downtrend is in progress.
RSI with period 2 is above 70. Marking higher price in overall downtrend – better price for sell position entry.
RSI with slower 12 period, gives us the information regarding the trend. Faster RSI gives us signal to enter the position in the direction of the trend.
Exit from position:
Take Profit: 35 – 100 pips.
Stop loss: Max 30 pips
Conclussion: This forex strategy alone can produce interesting positions entries. Results can be improved by considering trends on higher timeframes, historical support and resistance levels , coupled with important news.