My Swing Trading Strategy

Ok folks, this is the system(s) i trade in my swing trading. I must give much credit to mr effi lang, who provided a large portion of this system called the 25/50 system, which can be found discussed in full on Forex Factory Forums and Babypips.
The combination however, i feel is a great way to approach swing trading and has worked wonders for me in the past. It is a little complicated and has many rules to follow so bear with me.

Set-Up Charts: (Daily Charts)

  •      200 SMA (Purple) - applied to close
  •      50 EMA (Light Blue) - applied to close
  •      25 EMA (Pink) - applied to close
  •      8 EMA (Red) - applied to open
  •      5 EMA (Yellow) - applied to close
  •      100 Period ATR
  •      14 Period RSI (Relative Strength Index) 

Entry Signals:

  1.   When the 5 EMA Crosses the 8 EMA in the up direction and RSI is above 46 level we enter a buy position, When the cross is in the down direction and RSI is below 54 we enter a sell position. 
  2.   When a daily candle closes and then opens crossing the 50 EMA we enter in the direction of the cross.  For this type of entry, if the price retraces back up to the 25 EMA, we should have exited by now. If it crosses again in the direction of the original trade we re-enter position. 

Stop Losses:

We place stop losses at exactly 1 100 period ATR value away from the entry price. EX: (100) ATR = 0.0123, then ATR value is 123, and S/L should be placed 123 pips away from the entry price.

Exit Strategies:

1- For trades that are in sync with the 200 SMA, drop down a timeframe to the 4 Hour charts. Use the cross of the 5/8 in the opposite direction as the exit for this timeframe.

2- For trades that are not in sync with the 200 SMA, TP is 70% of ATR value. This must be set when entering the trade.

3- If RSI crosses the 50 level in opposite direction exit trade with loss or profit.

Money Management:

Every 50 pip move in the direction of profit we move the S/L 25 pips in the same direction. We Risk 5% of the account every trade. EX: (.05 x equity) /ATR = amount of lots.

Extra Rules:

  •      Write down every trade in excel workbook 
  •      Follow system to the letter

The 200 SMA: This serves as a filter for our trades. If cross, whether it be by the first or second system, is underneath the 200 SMA and is a sell signal, then it is said to be with the 200 SMA Filter. So, if a trade is with the 200 SMA filter, then we hold it until a cross (opposite) on H4. If against the trade, we take profit at 70% ATR

If there is genuine interest in this thread, then i will post more charts and ideas, etc. I would like to hear from you, any suggestions, comments, or if youd like an extra contact in forex.

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Hello! Please, I would like to know if you are using atr 50 or 100 because you posted it as 100, but the picture shows 50. What are the pairs that we can use your method? Thanks a lot!

Thank you sir i totally did not notice that. The ATR level is 100! LET IT BE KNOWN!

Hi! Please look at the picture you posted, it shows the atr(50), sorry, but I am confused about it. Please, what are the pairs that we can use your method? Thanks a lot!

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I am new to forex. I am doing not bad. Win in 5 trades and loose in 1. Btut that stupid one takes away all of earning and capital. I mostly trade only by reading candles. B4 taking any position I see if any upcoming news for the pair, Long term trend ( by drawing trend lines). But I don’t feel easy with EMA though I see many tradres use it as prime indicator. I really feel mess with it. So many SMA and EMA to watch!!! I don’t know wtz the function of different SMA and EMA. Would anyone describe shortly for EMA and SMA? or anysite to learn about it detail?plz help ur fello trader.

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Hi there,

Babypips has an excellent chapter in this subject…check out this link:
Price Smoothies | 4th Grade: Moving Averages | Learn Forex Trading and go throught all 6 pages of it.

Hope that helps :slight_smile:

Marcin - I am live trading your “Simple 30 …” strategy and it is doing well. i will demo this one 1st and see how I do with it. thank you very much for all of your postings. d.

Nice setup, I will try it out on demo, looks like it may also compliment OzFx’s daily setup.
Another good one to watch is a 5ema crossing a 50ema on the hourly chart.

Anyone still using this system. If so is it any good?

I am new to Forex and i learn more, thanks.

Kind Regards!

How should i calculate tp for against trade? Is it entry Val*(1+.7*ATR)?

Hi @ChrisMil -

I notice that polishpip started this thread in 2008 and hasn’t been here ever since. I wouldn’t expect a reply any time soon.

But using ATR to calculate distance between entry price and stop-loss price is a rational way to limit exposure to a market moving the wrong way. Many traders would say its more accurate to use the price action visible on the price chart to find the top-loss level.