This forex strategy uses proportional cost averaging in 1H chart (of any currency pair) to achieve steady results. System is particularly effective in trending market. It trades with high activity. Despite using averaging, strategy can be still considered conservative. It limits the number of trades to 10. Strategy does not increase increase leverage on consecutive trades. In unfavourable market conditions all trades will be closed on EMA confirm trend reversal. Furthermore, risk reward ratio of the strategy is proportional.
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Strategy was tested by Alpha proportion MT4 EA on 1H EURUSD data for period of over 15 years. EA used for testing (Alpha proportion) was created by theforexkings team and is able to trade this forex strategy (among others automatically).
Tools and indicators used in this forex strategy
Timeframe: 1H
Currency pair: EURUSD (Strategy works on any currency pair with adequate modifications)
EMA filter (400, 100): Position of EMA fast compared to EMA slow signalises trend (fast above slow -uptrend, fast below slow - downtrend. Ea will trade only in the direction of trend.
Target profit (1 USD, or equivalent in account base currency): Initial target profit is USD. It will be multiplied by the number of opened averaging trades.
Max loss (set ultra wide in EA inputs): Not applicable. Trades are to be closed on EMA trend reversal.
Averaging interval (200 points): Points between consecutive averaging trades.
Trading: There is no specific signal. Strategy trades consistently during the trend with intention of averaging the price and following the trend, taking advantage of inherent FX market volatility.
Closing the losing trades: close all existing trades once EMA trend reverses.
After successfully closing trades in profit, wait one minute before resuming trading.
Max open trades: 10
Lot size: No more than 0,01 (0,1 lot toal) lot per 1500 USD of account balance.
Spread: Make sure you use STP/ECN broker with total trade costs below 1 pip. This is a high activity trading system, therefore keeping trading costs low is extremely important.
Forex strategy rules
Sell
EMA fast trending below EMA slow. Downtrend. Trade short only.
Averaging trades should be opened only with defined points distance between them.
Target profit: Initial target profit multiplied by the number of opened short trades.
Closing the trades: EMA fast closing above EMA slow. Signaled new uptrend.
Buy
EMA fast trending above EMA slow. Uptrend. Trade long only.
Averaging trades should be opened only with defined points distance between them.
Target profit: Initial target profit multiplied by the number of opened long trades.
Closing the trades: EMA fast closing below EMA slow. Signaled new downtrend.
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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.
