Forex Trading Strategy

Moving Average - Multiple TimeFrame

The multiple timeframe moving average trading strategy uses one medium-term and one short-term timeframe to improve the odds for successful currency trading. The strategy is designed to trade only in the overall direction of the market trend. Always remember: the trend is your friend. If you buy dips in the uptrend, you are making pips. If you try to short, you will lose pips.



Forex Chart Setup

Time Frame's Used : 1 hour and 5 min chart

Indicator 1 Hour Chart: 100 Exponential Moving Average (EMA)

Indicators 5 Min Chart: 200 Simple Moving Average (SMA) and 5 Exponential Moving Average (EMA)

Recommended Trading Sessions: Euro and US

Currency Pairs: Any



Step 1) Defining The Overall Currency Trend



Price trading above 100 EMA > Trend is up.

Price trading below 100 EMA > Trend is down.

>>> In the example above, the overall trend in the Pound/Dollar is clearly up.

Forex Moving Average Cross-over system defined

A moving average cross-over system consists of at least 2 moving averages, a long period MA and a short period MA. A signal to go long is generated when the short MA crosses the long MA from below. A signal to go short is generated when the short MA crosses the long MA from above.



Step 2) Using A Moving Average Cross-Over System To Enter A Trade



The price is trading above the 100 EMA in the 1 hour GBP/USD chart, so we will look for long trades only.



GBP/USD Trade Explained

• The moving average cross-over system gave us a signal to go long @ 1.5889 in the uptrend defined by the 1 hour chart.

• Stop loss is placed 3 pip below the most recent level of support @ 1.5860.

• Target is twice the risk or at least 50 pips.

• Target is 58 pips @ 1.5947.

• About one hour later, the trade hit our target for 58 pips.



See other trading indicator.... Click Here..



---- sbudij / karawangForex ----- by; Luca De Vid --------

Forex Trading Strategy 2011-08-26T20:15:00-07:00 Rating: 4.5 Diposkan Oleh: admin