To risk 10 pips to get + 100 sounds like a good risk reward ratio. This is classical / conservative forex strategy, that can be applied on any market. It is using two of the most well know tools of forex analysis. Technical indicators MACD and MA (moving average). Strategy doesn't produce exponential gains as some of the extremely aggressive strategies do. This strategy allows to open multiple trend following positions allowing us to improve our leverage while in trend. It provides stable and relatively secure gains, when done correctly.
Forex indicators used in trading system
MACD (Moving average convergence divergence) 24,52,9
EMA (exponential moving average) with period 5 (green) and 14 (red)
SMA (smoothed moving average) 200 red
Forex strategy rules
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SELL
Price together with both EMAs trending below SMA 200.
MACD histogram above zero line.
EMA 5 crosses EMA 14 downwards. We enter the trade short on first candle closing after the EMA cross.
Another trade can only be opened if previous one is in profit. At point of entering another trade to the same direction we move stop loss of previous trade to break even.
Stop loss is placed above the signal formation.
Take profit: We exit all short positions once MACD histogram closes below zero.
BUY
Price together with both EMAs trending above SMA 200.
MACD histogram below zero line.
EMA 5 crosses EMA 14 upwards. We enter the trade short on first candle closing after the EMA cross.
Another trade can only be opened if previous one is in profit. At point of entering another trade to the same direction we move stop loss of previous trade to break even.
Stop loss is placed below the signal formation.
Take profit: We exit all short positions once MACD histogram closes above zero.
