If you look for a day trading system utilizing RSI forex indicator, look no further. This system has been tested for profitability on high quality historical data since 2003. It offers conservative approach to position entry and liquidation. The strategy allows opening only one trade per market side and each position is protected by SAR based trailing stop. RSI is used as a momentum trigger. Strategy has produced some nice results in all the tests.
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Additionally, alligator indicator is used to determine the trend. Parabolic SAR confirms the trend and provides a lead for trailing stop. Strategy requires TS to be adjusted after each candle close.
This day trading forex system is provided with free expert adivsor suitable for testing. Courtesy of theforexkings.com.
Used tools and indicators
Following settings have been used to achieve the results captured in screenshots.For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.
Alligator forex indicator (130,80,50). Strategy works for extremely wide range of alligator period. When adjusting it, consider the time period and time frame. Run as many tests as necessary to find a suitable setting. We have tested the system for this single combination of alligator periods. It is clear that there are a thousand of more profitable combinations for this specific day trading system.
Parabolic SAR (max 0,05, step 0,01. Immediate trend filter. To enter the trade price must be aligned both with SAR and alligator. SAR will also lead the trailing stop.
Relative strength index (RSI period 15). RSI entering the overbought/oversold zone will be interpreted as sufficient momentum signal. We will enter the trade in direction of momentum, alligator trend and SAR trend.
Trailing stop. Is based on SAR indicator. Once we enter the trade TS is placed at last closed SAR dot. Additional distance can be applied to cover market volatility (trail stop extra distance 30 pips).
For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.
Forex strategy rules
All alligator lines aligned according to downtrend. From slowest at the top fastest at the bottom.
SAR closing above the price.
RSI falling below the 30 line, we enter the trade short on candle close.
Trailing stop is placed at last closed SAR dot + extra distance of 30 pips. We only close potions at trailing stop.
All alligator lines aligned according to uptrend. From slowest at the bottom fastest at the top.
SAR closing below the price.
RSI rising above 30 line, we enter the trade long on candle close.
Trailing stop is placed at last closed SAR dot - extra distance of 30 pips. We only close potions at trailing stop.
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Disclaimer: Expert advisor was tested for profitability on historical data. All screen shots provided are displaying real results of the test. However past data will never guarantee future success. Every expert advisor needs to be tested properly on demo account. LIVE use only on your own risk. Read full disclaimer. TheForexKings Team does not give any financial advice. TheForexKings does not take any responsibility for any user’s investments and investment decisions. All rights reserved. Strictly for personal use.