After months of digging through systems, books and courses, I finally found something that works for me. It meets the majority of rules advocated by traders worldwide:
1) It is KISS.
2) Has defined SL and TP.
3) Entry is based on simple rules.
80 EMA applied to close – our entry point.
200 SMA applied to close – For easy to read trend direction – advanced Traders probably won’t require this.
RSI – Set to 80.
Pick any pair you like, I have traded almost everything with this, the majors move much faster and can hit your TP really quickly. The minors can stagnate at times and hover on the 80ema, making them a bit more tricky to make profit as well as larger spreads.
So you now have your pair, lets assume its AUDUSD.
I have used both the T1 and T4 timeframe to trade, and a friend has been using it on T5 however it must be stated this is still in its infancy, and I am still trading this on a demo account. I do plan to go live by month end however.
Do you look for long or short entries?
If the 200SMA is upward sloping and the RSI is above 50 we look for long entries, we place our buy orders on the 80ema plus the current spread for the pair.
If the 200SMA is downward sloping and the RSI is below 50 we look for short entries, we place our sell orders on the 80ema minus the current spread.
Stoploss and Take Profit.
Currently I use a manual stop that a manoeuvre just above the 80ema once I am up 20pips, I have also started doing two smaller trades rather than one large trade and lock in one TP at the resistance/support depending on direction of trade. The Green lines in the image below show where I set my first TP and then I leave the other trade to ride or until it nears the 80ema again.
Stoploss for the initial trade is set just below the last 80ema breach, and are reflected by the red horizontal lines.