63# Smashing Forex System 2 Trading System
Submit by Janus Trader (author Frank Lim)
Pairs:all.
Time Frame: 4H and higher
Indicators:
Exponential Moving Average 60-period (EMA60, Blue color in the
illustrations)
Commodity Channel Index 14-period (CCI14)
These are standard, common indicators and are included in every charting
program. You can use any charting software program you like: E-signal,
MetaStock, TradeStation, MetaTrader….
This system is only used for daily timeframe. You can also use it for 4-hour
timeframe. But in that case, you have to tweak the stop loss, profit target,
trailing stop appropriately.
Rules for Sell Signals (Short Trades):
There are only two rules for sell signals:
1. Price closes below EMA60
2. CCI value is lower than -100
When we have these two conditions, we enter at market price with two lots
- Stop Loss: We place a protective stop loss either just above EMA60
or at -200 pips, whichever less risky.
- Profit Targets: When we have 200 pips in profit we exit one lot.
Move stop loss to break even for the second lot. We then use a trailing
stop of 200 pips for that lot. That means, when we’re 400 pips in
profit, we move stop loss to 200 pips. And so on…
We can also move stop loss to the recent low each time price break that low.
That way, we can follow the trend until the end.
Sell Trade Example:
Figure 1 - Price closes below EMA60 and CCI value is lower than -100.
We enter with two lots. Entry price: 1.6505. Stop loss is placed just above
the EMA60 at 1.6705 (risk = -200pips)
Figure 2 – At 1.6305 we exit the first lot for 200 pips in profit. At that
time, we also move our stop loss for the second lot to break even. We then
use a trailing stop of 200 pips for that lot.
Figure 3 – Price finally hits the trailing stop. We exit the second lot at
1.5905.
Rules for Buy Signals :
There are only two rules for sell signals:
1.Price closes above EMA60
2.CCI value is lower than +100
When we have these two conditions, we enter at market price with two lots
- Stop Loss: We place a protective stop loss either just below EMA60
or at -200 pips, whichever less risky.
- Profit Targets: When we have 200 pips in profit we exit one lot.
Move stop loss to break even for the second lot. We then use a trailing
stop of 200 pips for that lot. That means, when we’re 400 pips in
profit, we move stop loss to 200 pips. And so on…
We can also move stop loss to the recent high each time price breaks that
high. That way, we can follow the trend until the end.
Share your opinion, can help everyone to understand the forex strategy.
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Bailey (Monday, 09 March 2020 17:21)
god tear strategy love it adapted to the stop loss on the prior candle to the explained criteria of the strategy or if the prior candle highs closed lower do the nearest high of a candle back tested on EUR/USD and got some 11 and 20 pip stop losses allowing for a larger lot size and more profit ( slightly aggressive still early days )
Tamburin (Friday, 29 March 2019 20:49)
Rules for Buy Signals :
There are only two rules for sell signals: must be buy signals
1.Price closes above EMA60
2.CCI value is lower than +100 must be higher than +100 CCI14