This forex strategy utilizes single exponential moving average. Additional lines are used to establish average price low and high. This simple and robust system detects price breakouts with momentum strong enough to escape EMA boundaries. Strategy doesn't offer a unanimous solution for take profit target. Instead, it is suggested to exit the position based on average swing size.
Trader simply needs to trade this forex strategy for some time to have profit target in the eye. The idea is to exit the position in profit before the correction its is simple and more importantly it works like charm.
Used forex indicator
EMA (Exponential moving average) period 14. Additional lines are added (+ 400,-200). Those will serve as average low/high tunnel boundaries. Price closing outside of a tunnel will be considered to be a breakout. Momentum necessary to escape EMA 14 boundaries is substantial and the signal is therefore reliable.
Strategy works on 1 H chart of EURUSD, using it on any other currency pairs would require adjusting additional line, but it can be done.
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Forex strategy rules
Apply EMA 14 in the chart. Add two more additional lines (+400,-400 red dotted line).
SELL: Price closing below bottom red dotted line: Enter the trade short on candle close. Stop loss is placed above the signal candle high.
BUY: Price closing above top red dotted line: Enter the trade long on candle close. Stop loss is placed below the signal candle low.
This is extremely simple forex strategy that works surprisingly well due to basic market fundamentals. You are welcomed to test it one other currency pairs and different timeframes.