The Koala System ( Newbie Friendly )

Good day forex trading koalas.

In this post, i will like to share about how one can make use of The Koala System for forex trading.


The Koala System is by no means a get rich quick method for forex trading. There are no guarantees that you will profit from this method. This is a trading style that i believe helps prevent traders from entering trades against the trend and thus increasing the chance of success. It may also help cultivate a patient and defensive trading style due to the nature of the system.


After suffering three margin calls, i needed a way to help myself. I was trigger happy in entering trades and often went against the trend! Knowing the pain, i started to help newbies to forex in forums. One day, i decided to start a blog to share to newbies more about forex. It is newbie friendly and contains [B]my forex articles and views on EUR/USD. [/B] After that, i began to search high and low for a suitable trading system to help myself and anyone who was interested. I found many systems based on moving averages and i liked the idea as it was not a fast and furious way of trading. I slowly adapted and customized the various systems over the months and The Koala System for Forex Trading was created!


Using MT4,

we deploy 3 moving averages on the chart. Parameters are

  • Smoothed
  • Applied to Median Price ( High + Low / 2 )
  • Period of 3 ( Red ) , 6 ( Green ) , 9 ( Blue )

This gives us our primary indicators.

Next we deploy 2 moving averages on the chart. Parameters are


  • Exponential
  • Applied to Closing Price
  • Period of 200 ( Black )


  • Smoothed
  • Applied to Median Price ( High + Low / 2 )
  • Period of 50 ( Brown )

This two moving averages will serve as our secondary indicators.


While you can use any value for your stop loss and take profit, in view of proper risk and reward ratio and money management, recommended sets are

  • 30 SL 30 TP ( Normal )
  • 50 SL 50 TP ( Challenging )
  • 30 SL 50 TP ( Very challenging )

The more challenging the values are, the more precise your entries should be.

A buy or sell opportunity will surface when the

  • primary indicators becomes parallel towards the direction of the trade
  • brown secondary indicator is in the same direction and is not turning in towards the primary indicators. This functions as an immediate support or resistance warning too as the price often react to the moving average
  • black secondary indicator is not near the price action and hence not a potential strong support or resistance

Exceptional conditions

As the system relies heavily on trends, there are certain market conditions that will affect the performance of the system greatly

  • Low trading volume conditions resulting in no trends
  • Excessive flipping of the price action due to volatility
  • Major economic events resulting in unexpected spikes and momentum
  • A major support and resistance / trend line is not in the immediate region of the momentum. If you want to know what are the support / resistance lines i follow, you can find it in my EUR/USD Forecast over at my blog.

Picture examples

In this example, we see a rather clean entry signal to buy.

The three primary indicators are not converging and the secondary brown indicator is in the direction of the trade and not turning in towards the price action. Furthermore, the black indicator is no where to be seen.

If you notice, the price action is not cutting beyond the green indicator much. This is good because if the price action do cut beyond the green indicator excessively, it may indicate a failing momentum and hence the signal should be reevaluated.

In this example, we see a typical low trading volume market condition.

Due to a lack of clear direction, the primary indicators start to jumble up like DNA and hence indicating a low trade zone. The price action is simply too narrow and ranging to be of any use for trading.

In this example, we see another no trading zone.

In this case, the price action is choppy and is indicated by the excessive flipping of the primary indicators. Any attempt to trade in this condition may result in one’s stop loss getting hit due to the spikes. I will also like to highlight how we can see that the black indicator is acting like a support here.


I personally use The Koala System on the EUR/USD M15 time frame. I have heard of users finding success in other pairs and i would love to hear about it.

Do remember that The Koala System is not a fast way to get rich from forex and it does not guarantees you success. Forex trading is your own responsibility and you still need to understand the fundamentals and concepts of forex trading. Proper money management, patience and discipline is crucial. Having only a few trades in a week is common!

Trade safely.


This was my latest review on Sunday.

Good day,

The Koala System caught 2 major intra week trends this week! Did your koala catch it too?

I sure hope yours did because these two trends were worth more than 100 pips each.

Looking at the chart, we can see that Tuesday, Wednesday and Friday were wild ranging days and the Koala identified it correctly with the multiple flipping of direction.

I highly recommend that you stay out during those days as you can easily be on the wrong side of the fence.

Folks remember that The Koala System is not meant to be a holy grail system but rather a system to help highlight the trend and hence help prevent you from entering the wrong train.

Sometimes, to be not trading is a wise choice!

Trade safe.

1 Like

how’s your success with the system? what’s the win/loss?

hmmm, while i can record it down, the purpose of the koala system is really to prevent you from entering the wrong train. So that with proper money management, you can learn from your mistakes and experience forex in its full. Not following 100% on a system without understanding why… ( But of course i do not deny that some systems are great!!! )

But if you really must know, personally i took 2 trades this week. 1 hit SL ( But in profit ) 1 TP.

Seems like a simple system.
Will try it. Thanks.

Question: At 15M chart, if the 3MA have met the criteria (i.e. parrallel and trending down) but that happened and continue to happen since 10 candles ago, would it be too late?

How to know if it’s too late to enter?

Or i shouldn’t worry and just sell, as long as the 3MA stay parallel?

ah when in doubt, fall back to M5 to look at the 3 koalas there. If it is no longer parallel and trending down, hold :slight_smile: ) Or if you know of any important points. For example, EUR/USD NOW is at an important point which i have identified ( you can read about these lines in my blog . so i will not trade ( yes i am flat now )

The Koala System is really about patience… You average about 1 trade a day… and you need to use PROPER MONEY MANAGEMENT

1 Like

do you use any other indicators for confirmation? have you tried it on larger time frames for longer term trading

I like it! With some support & resistance lines it’s a nice way to see a trend and a cosolidation period.

yes, i have a 200EMA but it is still under Koala Labs ( ie still testing )

the price seems to react to it at times as a support / resistance… if you go to my blog and put all the history reviews, you will see that happening…

For longer time frame, yes i started of M30 but market conditions changes and it became too lagged. However these days, M15 is producing way too many false signal… hence Koala may change to M30 soon. Btw Koala Labs experiment suggest that any TF higher than M60 is pointless unless you trade weeks!

Yes… thats the purpose of the system… simple and easy. I do not believe in quick money and hence this style suits me… and you correctly identified that you must be aware of S&Rs…

The 3 Koalas are going to flip soon. Am waiting. However note the 200 EMA there. May be potential support.

true enough… koala saved me again and it has bounced up for now

1 Like

Nice idea trading801,

However, to make this work consistently the math has to work- meaning that you have to make more when you win than lose when you lose.

I will play around with some stop/profit ideas; if you want to continue this thread i’ll keep you posted.

Its really hard trying to get the right entry cuz i keep looking at the higher timeframe, you just look at the 15M and 5M correct?

oh yes please!!! i always welcome and am happy for inputs from folks… back at the other forum, it was a one man show and i was very tired :frowning: :frowning:

hi buddy, if you intent to hold a position for at most hours, then m15 is the max you see… do note your TP must not be too big too… let us know your findings!

koala is now no trade as you can see they are almost on top of each other!

i’ve seen a system almost exactly like this, i just think the MAs were Simple or maybe they were LW idr but!, the system worked good for me so hopefully this works good for others as well

hi there… thanks for dropping by… yap MAs systems are very popular due to the ease of use… while i do not know if this will work, at least my dedication and support is here… this is definitely not like those pc games that are released with bugs and no patch:P

anyway e/u price is now at impt area. 1.4910+ Koala has also shown that as the 3 koalas are going flat, indicating hesitation…

anyway if you folks want to know the impt points i pay attention too, it is covered in my e/u daily views in my blog.

hopefully i will see u often here… i value inputs alot!!

Find below a report by Koala Labs ! :slight_smile: ( ie my experiments to tweak the system )

EMA200 does seem to affect the price at times… example attached !

just got 22 pips! kinda getting the hang of this…kinda. Im trying to learn to look at the price action and how the candle moves too, and you’re right about only trade along the trend, i tried staying in the market all the time and that didnt do me any good.