1.32 Sma (high)/ 32 sma (low)
2.Parabolic SAR
3. 100 and 200 sma (close)
I have a few yrs FX experience however due to small account size, I closed it down and focused more on my larger stock trading account. It was during that time I developed this system. As far as I know, there is nothing just like it, so I think you will find it unique, and profitable.
The system has been tested exclusively with equities, however from doing some simple backtesting, it looks promissing on FX as well, and Will be posting from demo trades on here as examples.
Here are the rules for the system
Long Entrys:
* Price must close above the 32sma high or the 100/200 sma
* Price must close as a green bar
* NO Doji or pin bars allowed (ignore)
* Price must penetrate the parabolic SAR
* If price closes as a red bar, or a doji/ pin bar wait for next candle to break previous candle high and make sure all above conditions are true.
Short Entrys:
* Price must close below the 32sma low or the 100/200 sma
* Price must close as a red bar
* NO Doji or pin bars allowed (ignore)
* Price must penetrate the parabolic SAR
* If price closes as a green bar, or a doji/ pin bar wait for next candle to break previous candle low and make sure all above conditions are true.
Scale out:
* Scale out 1/2 your position on the next bar if you are in profit, and move stop to Break-even. If you are not inprofit from the next bar, wait as long as it takes until you are. Either you will make at least 1/2 your profit or get stopped out
Stops:
* Once you have taken 1/2 your profit, and your stop is at break-even, move your stop up to every new candle to the value of the parabolic sar as long as the parabolic sar value is greater than the value of your initial entry. This is basically a trailing stop done manually.
* (optional)If your long, and the next candle closes as a doji, pin bar, or red bar, immediately move stop to entry candles low. This will greatly reduce risk of $ lost, however it may also increase the chance of being stopped out before the market makes new highs. This is why I left this rule as optional.
Re-Entry:
* If you feel you have been unfairly stopped out, lol and think the market has more to go, then your rules for re-entry are : 1) break of previous candle highs 2) Price must be above sar, and 3) price must be at least above the 32 high. Your stops are done the same way as above.
The downside to this system, like any system based off MA's is that it lags price, so sometimes you find yourself buying a top or selling a bottom. I worked with many different MA's to find that a 32sma works best. Its a fine mix between not being to volatile, but its not too slow either. This is why we use the parabolic sar for stops, because they are usually far enough down to where IF the market really is about the move in the desired direction, only a small correction will take place before a much larger move up giving you the right amount of space. I like to use this system off 1hr charts the most and the daily as well. Anything below 1hr and your on your own.
For simplicity, I'm going to only trade the three majors: EU, GU, UJ
I have made three videos on how I trade this system. For those of you with skype and would like to learn more. PM me. my handle is big_pipin