62# Smashing Forex Trading System
Submit By JanusTrader (author Frank Lim)
Pairs:all.
Time Frame: 1H and higher
Indicators:
Exponential Moving Average 9-period (EMA50, Purple Color in the
illustrations);
Exponential Moving Average 20-period (EMA20, Blue Color in the
illustrations);
Exponential Moving Average 50-period (EMA50, Green Color in the
illustrations);
Exponential Moving Average 200-period (EMA200, Orange Color in the
illustrations).
Rules for Buy Signals (Long Trades):
- We must first establish that we’re currently in a strong uptrend. The
conditions for determining that price is in a strong uptrend are as
follows:
a. Price is above both EMA50 and EMA200
b. EMA50 just crossed EMA200, and is currently above EMA200.
c. MACD value is positive.
- When we already know that we’re in an uptrend, we’ll then wait for
price to pull-back (retrace).
When price declines, it makes MACD value decrease and MACD value
eventually becomes negative.
- The trigger is when MACD value turns from negative back to positive.
When that happens, we enter at market price with two lots.
- Stop Loss: We place a protective stop loss 1 pip below the Lowest
- Profit Targets: We have 2 different exit strategies for the 2 lots as
follows:
- Exit Strategy 1: We exit the first lot when MACD turns from
positive to negative. At this time, we might also move the stop loss for
the second lot to break-even.
- Exit Strategy 2: We exit the second lot when EMA9 cross EMA20 to
the downside.
-
Buy (Long) Trade Example:
Figure 1 - Price is in an uptrend. Price is well above both EMA50 and
EMA200; EMA50 just crossed EMA200, and is currently above EMA200;
and MACD value is positive.
Figure 2 - Price pulls back (retraces). When price declines, it makes MACD value decrease and MACD value eventually becomes negative.
Figure 3 - MACD value turns from negative back to positive. When that happens, we enter at market price with two lots
Figure 4 - We place a protective stop loss 1 pip below the Lowest Price
of the Pull-Back (Retracement).
Figure 5 - We exit the first lot when MACD turns from positive to negative. At this time, we might also move the stop loss for the second
lot to break-even
.
Figure 6 – We still have one lot in the trade. Price keeps going up. We have more profit
Figure 7 - We exit the second lot when EMA9 cross EMA20 to the downside
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