Simple 7 Forex Trading Strategy

akatom2u 2012-03-26 21:58:00 UTC #1

Tom's Simple 7 Strategy
Preparation of charts:
Install a 7 close price EMA.
Install a 50 close price EMA
Basic instructions:
If the 7 EMA is lower than the 50 EMA trade only the short opportunities for maximum risk/reward.
If the 7EMA is higher than the 50 EMA trade only the long opportunities for maximum risk/reward.
Specific instructions:
If the closed candles are above the 7 EMA trade long.
If the closed candles are below the 7 EMA trade short.
This is a trend-based strategy. The 50 EMA is there to indicate an increasing, decreasing or consolidation trend. I would not be interested in trading this strategy in a period of consolidation.
Warning:
These instructions expect that you have basic trading experience and is not meant to teach or train you in trading derivatives or forex. Babypips and ForexFactory are excellent websites with basic trading education resources.
With that said, you can use this method on any timframe, but since we are differentiating the positions above and below the 7 EMA that means you will have to monitor your trade constantly after you enter it.
Note:
This method was left simple to allow people to use it as I basically set it forth, but also to allow you to adjust it to meet your needs and allow room for your new ideas based on it.

(Intellectual property of Tom, akatom2u) At least give me credits.

hedgehog 2012-03-27 03:42:17 UTC #2

Credited.

kammy 2012-03-27 05:27:06 UTC #3

I’ve tested this method and seems to work. Liked it.

akatom2u 2012-03-27 06:48:44 UTC #4

Thanks hedgehog I hope you benifit from it. Thanks kammy, it’s great for scalping. :59:

Haley12 2012-03-27 07:16:48 UTC #5

Thanks akatom2u to share these simple 7 Forex Trading Strategy with us. I will try these strategies.

d-pip 2012-03-27 07:22:20 UTC #6

Kammy,

What time frame, profit target and stop loss have you been using?

thanks!

kammy 2012-03-27 08:07:48 UTC #7

5 minutes time frame, my stop loss depends on spot price (my FOREX program gives suggestions) and with no profit target as I am online and just take my profit when I am OK with it. I’ve tested this method 3 times-short today, all 3 with profits. This is a simple method but as akatom2u said “These instructions expect that you have basic trading experience…” and I think the moment you will dive in is a critical factor (timing is always a critical factor with trades). To be continued…

Stevecsd 2012-03-27 14:12:22 UTC #8

This method looks OK for an entry. However, unless you build in take profit points along the way, you could be vulnerable to “bounces”, quick up and down motion (or down & up), and pullbacks.

Just take a look at the 5 minute chart for the EUR-USD today 3/27 & yesterday 3/26.

I do agree with him that this must be watched carefully, and if your trade starts to reverse, close it out quickly.

An example of this is below. The YELLOW line is the 7 EMA line. Capture of EUR=USD 2012-03-27 time on my charts from about 13:20 to 18:25. 5 minute chart.

Steven Currie

Traderjo12 2012-03-27 16:39:23 UTC #9

This is awesome! I am going to test it! Thank you!!

akatom2u 2012-03-27 21:28:59 UTC #10

This is a trend-based strategy. The 50ema is there to indicate an increasing, decreasing or consolidation trend. I would not be interested in trading this strategy in a period of consolidation. That is the time you spend studying or doing something besides forex. Forex for me is not all work and no play. Of course when I first started it was all learning and learning and seeking and learning…lol

Traderjo12 2012-03-27 22:33:10 UTC #11

Could not agree with you more!

akatom2u 2012-04-03 01:53:57 UTC #13

This was a trade made tonight by a friend, he gained 10 pips. The system still works!

akatom2u 2012-04-03 01:56:15 UTC #14

Thanks,I hope you do well with it.

akatom2u 2012-04-17 22:01:27 UTC #16

Look at this day, the 50 EMA is going nowhere. The 7 EMA actually tangles up with the 50 in the end, this is a no trade day for E/U in US time for me.

akatom2u 2012-04-17 22:06:59 UTC #17

This A/U chart on the same day is a good opportunity for the Simple 7 method. Look at the 50 EMA, it is not level.

akatom2u 2012-04-27 22:30:59 UTC #18

This is my week of trading only the simple seven strategy. The losing trade was closed when the candle closed on the opposite side of the 7 EMA. I then opened a trade in the opposite direction for a profitable scalp.

akatom2u 2012-05-10 21:25:18 UTC #19

What do you guys think of using the RSI set to 20 periods on the 15m chart and using the 45 and 55 levels for entry and 50 for exit as a filter for Simple 7?

akatom2u 2012-05-11 17:34:34 UTC #20

Here is another week of trades using the Simple 7 Strategy. I am working a fulltime day job so some of these trades are set and forget trades. The last trade was TP 10 pips and SL 10 pips, had I set it for 20 pips SL I would not have lost it. Anyway Simple 7 seems to still be a profitable trading strategy.

wigglez 2012-05-12 01:18:23 UTC #21

Hehe, leave it to me to botch it up.

Backtested it thursday, and traded it friday.

From backtesting it, it looked like I could set my SL to 20 pips and TP to 10 pips and come out ahead.

Friday was a big news day and I shouldn’t have been trading at all, but… I did anyway.
I set my order when candle closed above/below the 7.

Here’s a screenshot to give an idea as to the mess I made.
http://wigglez.net/trading/simple7_01.png

Needless to say I lost all trades, I might have won one of them, not sure. Can’t login now to check.
I shouldn’t have played the more flat 50’s either.

Lost about 90 pips, lol

akatom2u 2012-05-12 12:49:26 UTC #22

Wigglez, I am so glad you checked out Simple 7! Yes, I agree, you should have waited with that 50 ema not really direction bound, I traded myself and lost 10 pips on friday. Try trading just one trade pair at a time with Simple 7? My thinking is 40-50 pips profit per week is better than 80-200 pips loss. Wigglez, this is not hard, don’t make it hard or make work out of it bro…If the 50 is flat in E/U, maybe look for another low spread pair you like? On a demo you could try 5m or 10m scalping or pipsing just to get the idea in front of you if you have the time, 3-5 pips TP and up to 12 pip SL?