This forex strategy employs oscillators – RSI and Stochastic, together with SMA (Smoothed moving average) as trend identification tool. Combination of these tools helps to pick great entry within any currency pair.
Timeframe: 1 Hour, 4 Hours, 1 Day
Any currency pairs.
SMA (Simple moving Average) 130
RSI (Relative strength index) period 3. Horizontal lines 80 (instead of 70), 20 (instead of 70).
Stochastic (2,3,3). Lines 70 (instead of default 80), 30 (instead of 20).
Forex strategy entry rules:
Buy:Price trending above 130 SMA – uptrend. RSI below 20. Stochastic lines crossed under 30 (horizontal line in indicator window). Price candle closed while all entry conditions were met.
Sell: Price trending under 130 SMA – downtrend. RSI over 80. Stochastic lines crossed over 70 (horizontal line in indicator window). Price candle closed while all entry conditions were met.
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Stop loss is placed at the latest swing, before position entry.
Exit position with profit when stochastic crosses its lines again. Alternatively use trailing stop. In this case trailing step should be equal to the distance between entry and stop loss.