Okay so I always hear about people talking about the trend being your friend so I thought I’d come up with a system that does just that. (Disclaimer: This is coming from a total newbie.)
From everything that I have read, I thought I would combine a couple of trend-following indicators. I picked EMA (100) and RSI (9) and applied them to the 1-hour timeframe. I’ve read in some forums that a lot of traders pay attention to moving averages especially on the daily timeframe. But because making a system based on the daily timeframe generates only very few signals, I thought I’d put it on the 1 hour instead. I also saw that price reacted well to the MA, finding support/resistance from time to time. As for the RSI, I intend to use it as a “filter” to confirm if the trend is strong or not.
Here’s my idea for an entry:
Sell if price is below the 100 EMA, RSI is below 50. Buy if price is above 100 EMA, and RSI is above 50. ONE MORE THING! An entry is only valid if reversal CANDLESTICKS happen.
The stops for the trades should be below the EMA. The profit targets should be at support and resistance areas. However, if the RR ratio is less than 1:1, that’s a no trade.
Here are a few sample trade setups:
I haven’t tried this system before so please feel free to let me know what I can improve on it! Message me for questions. I’ll be updating it for this coming week. Thankls!