Trading strategy by the Moving Average
Here's an option of a classic trading strategyIt is especially suitable for beginners and traders who have no luck with the trading strategy. EURUSD, GBPUSD, AUDUSD, USDCAD currency pairs are used in trading on the hourly timeframe.
For trading, the standard Moving Average indicator (period 8, exponential method, apply close). It can be found in various terminals and even in mobile applications, so trading will be available to you everywhere.
Rules of the trading strategy
With all the automatic trading options, it is advisable to observe the markets manually in order to fix the indicator sag. After a strong movement, during which we see the moving average breaking away from the price chart, there usually comes a lull with the MA touching again. At the moment when the current price and the Moving Average touch each other, it is possible to open for the continuation of the movement.
It is important to remember that in distance between the first touch (price breakaway point from the MA) and the maximum reached should be not less than 50 pips for GBP/USD and not less than 40 pips for other currency pairs.
Number of bars or candles in the sag should be at least 5 pieces with the signal one included.
To enter the market preferably 2-3 points before the price touches the MA indicator. The question often arises, how to determine this distance, if the indicator redraws? The author's answer: by experience. If you are late with the entry, you can miss an already small profit.
Exit from the marketTake Profit: Take Profit of no more than 25 and Stop Loss of 12-15 points.
During testing, the ratio of profit to loss were quite high, but you need a broker with a low spread on the selected currency pairs.
Curious...Curious that the "author" did not have enough "experience" to deal with indicators on the screen's, which indicate accurate (up to a point) entry into both "BUY" and "SELL" positions. The "author" had enough "experience" but did not have enough "experience" to recommend the exact entrance. It happens. It made me smile.
In the 1st, 2nd, 3rd and 5th ovals the "author" in his screen indicated the wrong bars to enter the position... in this trading tactic, in the trading setap (in each) the price indicates the exact TP... apparently the "author" tested his "strategy" very little...