Check up on this easy forex trading system: This forex trading system use the trend. Each trader has to grasp this rule: “The trend is my friend”.
Phase 1: MAE
To establish the Trend (I name it The Main Trend), We use two moving average exponentials (MAE) :
Watch it out, some forex software writes EMA (Exponential Moving Average). An important factor of this forex trading system: Shifting average + exponential.
If MAE 14 > MAE 42, the main Trend is Up. That suggests you need to wait for a long signal. If MAE 14 < MAE 42, the main trend is Down. That suggests you have to wait for a short signal.
Phase 2: RSI
As a Forex indicator, we use RSI which observes the large Trend with extra accuracy. It doesn’t provide many false signals when price perform a little pullback. Our RSI length is 21 on this forex trading system.
Normally, we use RSI only to find small pullbacks, but sometimes it can help me to find our exit point in intraday. We use it like a pre-signal, we’ll see that later.
Phase 3: William’s %R
For us, William’s %R is the King of forex indicators. We use it to find the turning point of a pullback. In a simple word, William’s %R shows us when the end of a pullback is near. Did you understand that?
William’s %R value are between [-100 ; 0], but for us, when we write we do [0 ; +100]. Why? We don’t know. May be we don’t like negative numbers for this forex trading system.
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When 0 less than or equals to William’s %R <15, that means our small pullback is near dead. And at this moment, we open our eyes, and say to the market: “Show us the money!”. It’s only valuable if the Big Trend is Down.
When 85 < William’s %R less than or equals to 100, and if there is an Up Big Trend, That means the pullback arrived at its end. And we say: “Show us the money!”. In this case, we must have a Long Big Trend. Our William’s %R period is 7 in this forex trading system.
Did you see how MAE could help you to find the right direction? RSI showed us the market was Up even if prices did some little pullbacks. And William’s %R showed us the end of the small down trend. Isn’t this a simple and best forex trading system? For some more great systems check The foreign currency trading section in our site.