Forex Profit Trend Following Strategy 2

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Forex Profit Trend Following Strategy 2

This is useful for advanced traders and not recommended for beginners. This system is based on day trading and this aims to take maximum profit as possible and not reduce the accuracy of trades. This works on a 1 hour timeframe.

Forex  Indicators needed:

  • The 3 Moving Average smoothed and 6 Moving Average smoothed;
  • The 14, 5, 5 Stochastic;
  • The Parabolic SAR with settings of – 0.04/0.2;
  • Inside and outside bar indicator.

The Purpose of the Indicators:

  • 3 MA – The 3 MA is the trend identifier on a 15 minute chart. We use 3 MA because it’s fast moving average.
  • Stochastic and parabolic SAR are confirming indicators.
  • Inside bar indicator and Outside bar indicator can identify support/resistance and bullish and bearish market.

Long Entry:

  • 3 MA smoothed indicator is greater 6 MA smoothed indicator
  • The Parabolic SAR should be below the candle.
  • The fast moving Stochastic line should have crossed above the slow moving stochastic and should be climbing up, except if the stochastic is above value of 80 at, so no trade zone.
  • The inside bar indicator or outside bar indicator closed candle should be the bullish candle with the breakout.
  • Once all the conditions are met, open position.
  • Make sure the previous candle closes before you put order at the level breakout of the inside-outside bar.

Short Entry:

  • 3 MA smoothed indicator is less than 6 MA smoothed indicator.
  • The Parabolic SAR should be below the candle.
  • The fast moving Stochastic line should have crossed above the slow moving stochastic and should be climbing up, expect if the stochastic is above value of 80. No trade zone.
  • The inside bar indicator or outside bar indicator closed candle should be the bullish candle with the breakout.
  • Once all the conditions are met, open a position.
  • Make sure the previous candle closes before you put order at the level breakout of the inside-outside bar.

Exit position:

  • There are 2 ways to exit position, first is when the 2 MA reverse position or take profit at 12-18 pips depending on the currency pairs.
  • Set stop loss on the previous swing High or Low.

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