Trading strategy "Bagovin method"

Trading strategy "Bagovin method" is in the category of simple and profitable forex strategies. The trading strategy uses the two most common trading indicators EMA and RSI. "Bugovin method" can be used on any currency pair, which is an additional plus. The trading strategy has shown 85% successful trades on history.

Marketplace: Forex;
Currency pairs: various;
Timeframe: H1;
Indicators : EMA(5), EMA(21), RSI(21) all indicators applied Close;
Strategy: intraday;
Protective orders: stop loss.

Rules of the trading strategy

Entry to Buy

After crossing EMA indicator(5) up EMA(21) waiting for RSI(21) crossing the level of 50. If the level is not broken, then do not enter the trade. If the level is broken, we buy and set a stop loss at the bottom of the candle at which the EMA was crossed. In a classic "Bagovin method" leave the trade at the opposite crossing of the EMA. But not to track the movement of the price and EMA, I use a 3:1 (profit:loss) target.

A bargain for sale

After crossing EMA(5) down EMA(21) wait for crossing RSI indicator(21) with the level of 50 down. If the level is not broken, then do not enter the trade. If the level is broken, then enter to sell and set a stop loss at the level of the top point of the candle at which the EMA was crossed.

An example of how the strategy works

Let's look at an example of a purchase: 19.02.2010 17:00 EMA(5) c EMA(21) crossed. RSI(21) also showed a crossover with the 50 level. We waited for the close of the candle and entered into a trade at 1.3536. We set the stop loss at the lower crossing point, i.e. 1.3511. The difference was only 25 pips. Then we can see that if we exit at the opposite crossing (level of 1.3631), the profit will be 53 pips (2:1). If we set a target of 75 pips, in this case the profit will be more significant (this does not always happen, sometimes the backward crossover with a strong trend movement may not happen soon).