142# Trading in Trending with Retracement Trading System Daily

Daily Forex Strategy: Envelope with Two moving averages smoothed

Submit by Janus Trader 05/07/2013

This is an daily trend following forex trading system, based on the two smoothed moving averages and the envelope indicator. I think, that for forex strategies trend following, the best moving averages are those smoothed.

Time Frame Daily.

Currency pairs:any.

Forex Indicators:

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)

Rules:Trading in Trending with Retracement Trading System Daily

Long Entry

Setup step by step

1

Wait for the 3 Moving average smoothed cross up 8 Moving average smoothed;

2

Wait an pullback of the price, a red candle with body must be within ( high/low/close) the upper first red envelope band and lower first red envelpe.

This is the setup candle.

3

Place an pending order for the next day 4 pips above the high the setup candle and place a initial stop loss on the previous swing after 40-70 pips in gain move stop loss at -25 pips by entry point (the numbers of the pips depends by currency pairs).

4

Exit:

first option when price touches the second blue envelope band

second option when the moving average smoothed cross in opposite direction,

third option with profit target predetermined 150-300 pips.

Short Entry

Buy conditions are reversed.