Hey Forex Family. Long time no see! I appreciate everyone who contributed to my Stat Arb post but unfortunately I could never work out the major issues with it. I hope some of you made money from it.
Anyway, I have been medaling with a new strategy I developed and would love this community to take a look.
I am working with the same strategy on a 1hr chart but have developed for a more day trader approach with the 15 min chart.
Currency: EUR/USD
Time gram: 15 min
Indicators: 50 EMA set to close.
Add levels both positive and negative of 20 pips, 30 pips, and 37 pips. I color coat my charts so it’s easier to read as well as add more levels to fill in between 30 and 37 to make a thick band so it’s more visually appealing.
This strategy is not based on crossovers or any lagging indicator, just based on some math of volatility, simple trend lines and good R:R
My Theory For Short Trade (vise versa for Long Trades) : my theory is that price is over extended and overbought once it reaches the upper bands. When it does you will allow price to retrace and move until it allows for a trend line to be formed.
You will then form a trend line. Once price breaks the trend line you will go short and put the SL above the recent high.
As price moves down and touches the 50 EMA you will love your stop to break even. As price moves lower and touches the next closest level which would be -20 pips away from the 50 EMA, you will move your SL to the 50 EMA.
You will then keep moving your SL to the next level when price reaches the one just below.
I use the levels as a trailing stop and take profit automatically if the price reaches the lowest band or below OR if I get end up with a 5:1 reward over risk.
