- Parabolic SAR
- and Exponential Moving Average with periods: 10, 25 and 50.
On the example you can see how the schedule looks like, configured for trading on forex strategy «Forex Profit». Exponential Moving Average EMA 10 is painted purple, the average EMA 25 — painted dark yellow and the moving average EMA 50 — painted blue. Parabolic SAR (with standard parameters) is based on the graph in the form of points, located above and below the price chart.
Conclusion of the transaction on forex strategy «Forex Profit»:
Indicators forex strategy in FPS will indicate to you that it is necessary to conclude a bargain as soon as the average EMA 10 crosses the moving average EMA 25 and EMA 50. If the average EMA 10 crosses the moving average EMA 25 and EMA 50 from the bottom up, then you must open the deal to buy. If the average EMA 10 EMA crosses the average 25 and EMA 50 from the top down, you enter into a deal to sell. Just make sure that the Parabolic SAR (PSAR) is located below the price as soon as you sign a deal to buy, and on top — as soon as you open the bargain on sale.
Looking at the example above, on 15 October was a great opportunity deal to buy the currency pair USDCHF, which is marked with a circle and signed by the «Enter». Note how the exponential moving average crossed the 10 EMA Moving Average EMA 25 and EMA 50 and the Parabolic SAR indicator was under the price.
If you prefer to trade time intervals as indicated in the example, previously, make sure that the 15-minute price chart Parabolic SAR indicator is located in the same way with respect to price, as well as on the hourly chart. You should never trade against the 15-minute Parabolic SAR!
Exit the transaction, forex strategy «Forex Profit»:
The best signal to exit the deal is back down to the intersection of the 3-sliding EMA on the chart. Take a look, as in our above example, a dark blue moving average — actual price of a currency pair USDCHF — crossed down all three of the MA at the site have been circled and marked with the inscription «Exit» — a way out. If you this trading position for the whole week — you could take the market 275 points of profit.
Install safety stop-loss:
No matter what you do is open an account with Forex: cent, micro, mini or standard — you always have to trade when trading with a stop-loss order!
When trading forex strategy FPS you must set your stop loss on an open trading position just below the moving average EMA 50. As soon as your trading position trading in the right direction, respectively, to move the price and your stop-loss (the best option for this is a trailing stop, including trailing stop-loss of 1 point). And if your trading position goes against you, stop-loss order will lock your earned income. It is important that when the price crosses the moving 10, 25 and 50 EMA, your trading position has been closed.
Let’s look at an example of how forex strategy «Forex Profit» is working on a 15-minute price chart:
Trade Strategy FPS on a 15-minute intervals is more volatile, but it will give you the most number of transactions within one trading day. In the example discussed above, the higher you could make a deal to sell the currency pair USDCHF at 1.5060 and the price to close a trading position at a price of 1.5000 with a profit of 60 points.
One important caution when trading in the range M15: sometimes the price on the chart draws «Saw» the up and down through the mid-EMA: 10, 25 and 50. If this situation happens shortly after you have entered the market — close your trading position and wait until the moving averages do not disperse, and the indicator Forex Parabolic SAR will not give a strong trading signal.
Short-term «scalp» in 1-minute chart:
In the first example we made trade with technical indicators on the hourly interval, which by definition is called Swing Trading — a deal usually lasts for a trade for several trading days, and sometimes even several weeks.
In the second example, let’s consider a 15-minute price charts, which are usually traded day trader, hold a trading position within a single day.
Also called scalping trading in forex, when you use for transactions 1-5-minute price charts for small profits — «scalp.» In such cases normally keep a bargain from several minutes to an hour.
You can also use the forex strategy FPS for scalping the forex market by 1-minute price chart. Here is how to deal with this trade:
1. Instead of moving averages 10, 25, 50 EMA, as we did above, place the graph exponential moving averages with periods of EMA: 25, 50 and 100.
2. Often the best time for scalping market is the opening of trading in London (11:00 Moscow time), or trading in New York (16:00 Moscow Time), as at this point majors begin to move in a certain direction.
3. Once the price crosses all three moving averages, you wrap your bargain, long or short. If the price on the chart are 100 EMA down enclose short trade if the price on the chart 100 EMA crosses up — to conclude a long deal.
4. Make sure that the deal is profitable and you have 5-10 points profit. Should not try very long to keep a winning trade position, as the price tends to fall back and you can lose revenue. Take 5-10 points of profit when you can. Here’s an example on the 1 minute price chart:
Note that at 10:30 (on the chart during EST — it’s 18:30 Moscow time), you would enter into a long trading position on the currency pair USDJPY (big circle) as soon as the price of an average of 100 EMA crossed up, and in 10 : 45 you could close your open position (small circle) and take their 10-point profit. After that the price average of 100 EMA crossed down at 11:30 EST. You could make a deal to sell yen (large circle) and ten minutes later to close another 10 pips (small circle).