Monday, December 14, 2009

Forex trading strategy using Moving Average



Even at the simplest indicators it is possible to build a profitable system. This example has 2 movings with periods of 21 and 70. After the breakdown one of movings by the price standby begins. If prices turned, without having reach the 2nd (older) moving, the entrance is carried out at crossing (or a little earlier), MA (21). Stop-loss is places below a recent bottom (peak). The system has drawbacks - one of them is the false signal at the trend end. However, incomparable advantage is that it always follows trend, contrary to the wishes of inexperienced players to play against him.
One of the easiest ways to play with a trend. On the graph MACD 12/26 with a signal line 7 is used. The entrance is carried out: For Sale — at movement MACD from a maximum downwards, at care of MACD below a signal line.

Pose closing occurs at MACD the crossing signal line upwards. At achievement of low bottom by MACD, with the closure of the next “Short” a long (turn) opens and now pose will close at crossing MACD signal from the top to down, and will open at crossing from below upwards. And again, until formation of top by MACD… Stop is at a price slightly above recent high (low). The system works well in bright trend on 4-hour or daily, but majority advises to abandon MACD on Flat. Nevertheless, it is possible to play for MACD in range also. To do this you need a 15-30 min interval, and slightly other parameters of signal linesand MACD. I suggest you to play with coefficients and see what will be after. This tool has several hidden features starting from the divergence method finishing to usage of ostsilators over the MACD itself. Everything depends on the willingness of the trader to find his own weapon…

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