Hi
Not a new system, nor a particularly good one. But it may help some other newbies.
EMA (Exponential Weighted Moving Average) Cross Over System.
Setup 30 minute chart.
Add indicators: EMA(8) and EMA(64)
EMA(8) = Exponential Weighted Moving Average,periods set to 8.
EMA(64) = Exponential Weighted Moving Average,periods set to 64.
When the two lines cross trade in the direction of the trend. Exit the trade then they cross again. You can confirm the trend with:
RSI(14) = Relative Strength Indicator periods set to 14. If the RSI is above 50 then chances are bulls are in control (go long, buy), below 50 and the bears have it (go short, sell). Thanks to mamkeji (below) for reminding me of this indicator.
Has worked for me a number of times however care has to be taken since the lines can cross back and forth without any real profit. So automated trading with this is out. You have to wait a few candles or use other indicators to be sure it is a strong trend starting when the lines cross. I guess in theory it might be better on longer time frames (it is interesting to see the cross overs increase the shorter the timeframes get).
It seems to work best on a 30 minute chart. The pitfalls of this approach is it is easy to get duped into trading with a crossover that quickly reverses direction and your spread will have been the loss. I guess it'd suit a system with tight spreads better than one with bad spreads.
I only trade GBP/USD and EUR/USD. However it shouldn't matter which pair you used. I'm reasoning the key is volatility.
This strategy, I think, should work best with the least volatile currency pairs.
I'm reasoning this because it is the small market swings (volatility) that trigger the cross overs that don't go grow into a trend.
In addition: The longer the time frame the more the crossovers seem to reduce and the shorter the time frame the more they increase.
My guess is the safer you want the strategy the longer the time frame you use.
It is a simple strategy told to me by the sales guy at GFTForex before I moved on. I know there are better strategies out there (and hope to learn them). I'm also aware it should be possible to improve the strategy with other qualifiers for the crossover points and am interested on anyone else's suggestions.
I wanted to post it here because this forum needs strategies posting in order to help newbies like me.
The chart attached shows optimum buy sell points using this strategy and ignores the small crossover blips that would have cost money if the strategy had been followed strictly as described with no other indicators to help determine the trends.
Hope it helps.
Regards,
Matt
Not a new system, nor a particularly good one. But it may help some other newbies.
EMA (Exponential Weighted Moving Average) Cross Over System.
Setup 30 minute chart.
Add indicators: EMA(8) and EMA(64)
EMA(8) = Exponential Weighted Moving Average,periods set to 8.
EMA(64) = Exponential Weighted Moving Average,periods set to 64.
When the two lines cross trade in the direction of the trend. Exit the trade then they cross again. You can confirm the trend with:
RSI(14) = Relative Strength Indicator periods set to 14. If the RSI is above 50 then chances are bulls are in control (go long, buy), below 50 and the bears have it (go short, sell). Thanks to mamkeji (below) for reminding me of this indicator.
Has worked for me a number of times however care has to be taken since the lines can cross back and forth without any real profit. So automated trading with this is out. You have to wait a few candles or use other indicators to be sure it is a strong trend starting when the lines cross. I guess in theory it might be better on longer time frames (it is interesting to see the cross overs increase the shorter the timeframes get).
It seems to work best on a 30 minute chart. The pitfalls of this approach is it is easy to get duped into trading with a crossover that quickly reverses direction and your spread will have been the loss. I guess it'd suit a system with tight spreads better than one with bad spreads.
I only trade GBP/USD and EUR/USD. However it shouldn't matter which pair you used. I'm reasoning the key is volatility.
This strategy, I think, should work best with the least volatile currency pairs.
I'm reasoning this because it is the small market swings (volatility) that trigger the cross overs that don't go grow into a trend.
In addition: The longer the time frame the more the crossovers seem to reduce and the shorter the time frame the more they increase.
My guess is the safer you want the strategy the longer the time frame you use.
It is a simple strategy told to me by the sales guy at GFTForex before I moved on. I know there are better strategies out there (and hope to learn them). I'm also aware it should be possible to improve the strategy with other qualifiers for the crossover points and am interested on anyone else's suggestions.
I wanted to post it here because this forum needs strategies posting in order to help newbies like me.
The chart attached shows optimum buy sell points using this strategy and ignores the small crossover blips that would have cost money if the strategy had been followed strictly as described with no other indicators to help determine the trends.
Hope it helps.
Regards,
Matt
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