Hello everyone. I’m FXnavigator.
I have created a system that is very good for catching the daily trend and riding it out all the way till the last pip is won.
I wanted a system that is:
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Easy to understand
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Easy to execute
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Easy to repeat
I didn’t want several different indicators clouding up my candlestick charts. I, also did not want to see a bunch of others lined up at the bottom, making my charts smaller and smashed together.
My system uses the daily charts, along with two moving averages, and an RSI.
I set up the two MA’s like this:
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The 1st MA is RED and set to 20 (solid line)
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The 2nd MA is BLUE and set to 5 (dotted line)
The RSI can be set up two different ways, depending on your preference and what works best for you.
- Set the RSI to 50, and remove any other lines.
or
- Set the RSI to 55 and 45, removing any other lines.
How the system works:
Wait for the MA’s to go across each other, and for the RSI to be rising or falling past the 50.
If your using the 45 and 55, wait for the RSI to go across, depending on an up or down trend, for further confirmation that the trend is going in the direction you are anticipating it to go. I use a trailing stop of 150 pips. I do not use a limit order, or have a take profit target. I ride out the trend until it’s over. The trend is over when the MA’s touch again.
Take profit: I check the charts one or two times a day, to see how the trade is going. I like to take my profit every few days. What I do is, I close my position and reopen it again. What this does is keeps the pips I have collected, and prevents me from giving back what I have already earned. For example, your MA’s cross and the RSI crossed, too. After a few days (or weeks) you collect several hundred pips, and the market retraces 100 to 300 pips, and then continues to go in the same direction it was originally going. I don’t have to worry about losing my earned pips, because I have already taken profit. Some people like to move their stop after collecting a certain amount of pips, and trust that the stop will keep them from going negative on a trade. We all know that nothing is for certain in the Forex market. Remember when CHF dropped several thousand pips? I collected 2,400 of those pips because I was trading WITH the market. Some traders were going against it, and the market blew right through there stop order and kept on going against them for thousands of pips, because there was no one on the other side of the trade to sell it to. The traders that were trading for $10,000.00 per pip are now bankrupt, and in debt to their broker for millions of dollars. They lost all of the pips they captured, and were forced to watch the market continue to sink because they were stuck in their trades and could not get out of it. The name of the game is to collect pips, and KEEP THEM.
Since this is used on a daily chart, it is very unlikely that a sudden reverse swing of the market, will take you by surprise. Once the MA’s cross and the RSI moves past it’s mark, which should happen in close proximity of each other, the market can move from several hundred to several thousand pips. This strategy will be able to capture most of the pips that the market has to offer.