Trading with Retracement Forex Trend Following Strategy
This system is a combination of smoothed moving averages and envelope indicator. This works on a daily timeframe. And applicable in any currency pair.
Forex Indicatores needed:
- Moving average smoothed 3 period;
- Moving average smoothed 8 period,
- Envelope indicator period 5 deviation 0.5;
- Envelope indicator period 5 deviation 1.0. The deviations of the second envelope indicator depends by volatility of the currency pair this is only a indicative value.
Long Entry:
- Moving average smoothed must cross up 8 Moving average smoothed;
- The price must pullback.
- Red candle with body must be within (high/low/close) the upper first red envelope.
- Place a pending order for the next day 4 pips above the high of the setup candle
- Stop loss should be place on the previous swing. Move SL after 40-70 pips at -25 pips by entry point. Number of pips depends on the currency pairs.
3 possible exit point.
- Price must touch the blue envelope band.
- The moving average smoothed must cross in opposite direction.
Profit target predetermined 15-=300 pips.
Short Entry
- Opposite of the buy entry rules:
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