There are two kinds of exits: 1) the simple method. 2) the advanced method.
The Simple Method
You keep using a close below the 24 EMA as your exit until the value of the 24 EMA becomes equivalent to your entry level.
After that, you plot the 12 EMA. A close below is the end of your buy.
So let’s look at one of the two winning signals we got in EURUSD last week.
The intersection of the blue horizontal line and the black vertical line is where we start to rely on a close below the 12 EMA.
It closed for a profit of 108 pips. The second winning signal closed for a profit of 12 pips. So 120-37= 83 pips using the simple exit strategy.
Advanced
Now the advanced signal is a way for us to spot my original trading pattern on the hourly chart. Once your entry conditions are met. Look for a swing that occurred before your entry in the same direction.
What is a swing?
In a buy signal, the previous swing would be a move that took price above the 24 EMA, then below it before giving you the entry signal. The swing consists of point A, B and C.
If you do find that swing, Draw the Fibonacci extension and open up two positions. You’ll stop will be a close below point C. The targets are 127.2 and 161.8 extension. When Candle closes above 100 level move stops to break even. When it touches 127.2 move the second stop to 100 level.
Here is the chart with the swing exit.
Now you would have entered only twice the entire week if you were using the advanced exit signals. You would have taken two positions on the first entry, making 279 pips.
The second trade would have been the winning short, but rather than winning 12 pips…You would have risked at least 96 pips on the two positions while winning a total of 49.9.
Of course notice you risk more with the advanced method. So if you don’t know how to spot swings don’t worry about it.
This concludes the 1 hr day trading strategy. Note that the 5 minute strategy is different.