Averaging is one of the best methods of managing positions – when done correctly. By conservatively averaging the losing position.
With averaging we can get a bigger position at much better price. This forex strategy combines averaging method with sudden price movements and trend identification.
Strategy is long term profitable. Drawdowns in equity are common, therefore to trade this forex strategy, sufficient capital is needed.
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Forex strategy rules
We plot SMA (smoothed moving average) period 60(red) and 30 (yellow) in 30 min charts of any major currency pair.
We add additional line to SMA 60:
Above the SMA: 500,1000,1500,2000,3000
Below the SMA:- 500,-1000,-1500,-2000,-3000
SELL
Downtrend: SMA 30 trending below SMA 60.
First position is triggered by price touching the 60 SMA. Then we enter short on each of the positive lines above SMA. Each position is same size – recommended default 0,01 lot. We liquidate in overall profit rather sooner than later. We make sure that the previous position (series of positions to the same direction ) was closed before we enter another one.
Once the price temporarily surpasses the 2000 line at the top, we stop adding to the position. This way we limit our exposure. Once price reaches 3000 we exit our position.
Buy:
Uptrend: SMA 30 trending above SMA 60.
First position is triggered by price touching the 60 SMA. Then We enter long on each of the negative lines below SMA. Each position is same size – recommended 0,01 lot. We liquidate in overall profit rather sooner than later. We make sure that the previous positions in the same direction was closed before we enter another one.
Once the price temporarily surpasses the 2000 line at the top, we stop adding to the position. This way we limit our exposure. Once price reaches 3000 we exit our position.
Even after the change of the trend, we liquidate hanging position in average profit of all positions (profit). Once we enter the trade we are allowed to open another averaging positions even at the trend reversal.
Simple and super effective. Max exposure limited to 5x our chosen lot size. Do the math on how much exposure you can take without endangering your account. Additional trigger lines can be added if your money management allows it. For example 2500 and -2500 lines can be added, with stop loss line moved to 4000 and -4000.
