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Direction Movement Index Forex Trend Following Strategy
This is a trend following strategy based on the trend indicators. It works best on 15 minute timeframe and applicable to EU, GU, AU and UCHF.
Forex Indicators:
- Directional Movement Index (D+ D-, 14 periods),
- 5 Weight moving Average (close),
- 11 Simple moving Average (close),
- Parabolic Sar (0.1 0.01)
Rules for Direction Movement Index with MA Trading System
Long Entry:
- 5 WMA is greater than 11 MA,
- PARABOLIC SAR below the candles,
- ADX DI+ positive is greater than DI- negative.
Short Entry:
- 5 WMA is less than 11 MA,
- PARABOLIC SAR above the candles,
- ADX DI- negative is greater than DI+ positive.
Reentry Rules:
- SAR gives a signal again in the older direction of the trend.
- The crossover of the moving average determines the trend.
Exits and Stop
- Parabolic SAR signal in opposite direction,
- Profits are discretion for you (examples for profit: Pivot point’s levels, or predetermined profit target).
- Initial stop loss at the previous swing
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