Trading with Retracement Forex Trend Following Strategies

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.

1. Price must touch the blue envelope band.
2. The moving average smoothed must cross in opposite direction.
3. Profit target predetermined 15-300 pips.

Short Entry

Opposite of the buy entry rules.

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