To trade forex strategy «Daily Fozzy Method» you should choose — day interval, to enable set the selected currency pair (which can be any) Forex Indicator RSI (period 8, close), and then set as an exponential moving average EMA with a period 8 on the forex indicator RSI. To do this in your browser to choose forex indicator «Moving Average» and move it into the window of an already established indicator of RSI, a drop-down menu «Apply to» choose «First Indicator’s Data».
Similarly, the set indicator forex ATR with 20 as the window indicator forex RSI. Note: Under «Color» to choose «none», because we need only the volume.
- These indicators are present in a standard forex trading platform set MT4, ATRshannel — after forex strategy.
- On the main chart is a moving average EMA with a period of 28.
As a result, your resulting graph should look something like this:
Figure 1
Opening of the transaction on forex strategy «Fozzy Method»:
The rules for the transaction very simple — We look forward to the moment when the line of the RSI indicator crosses the MA.
- Open position to buy when the indicator line forex RSI crosses the MA from the bottom up.
- Open the deal to sell when the RSI line indicator forex crosses the MA from the top down.
We pay attention only to signals that appeared only after the closing day candles. No need to open a bargain on the same day, as soon as the trading signal, because it can easily and was not confirmed. Open a trade deal as soon as there was next candle (ie, opened a new daily candle).
Placement of stop-loss orders is very important to protect your capital.
There are several methods of installing a protective stop-loss orders:
I recommend using for this indicator forex ATR, which we also set using the chart. ATR indicator shows in the numbers of the volatility of currency pairs (see Figure 2). A small number of indicator ATR (30-50 pips) shows that the daily volume was small, the currency pair is extremely small moves. Large indicator indicator ATR (100-200 pips) shows that the market or present a strong trend, or a large flat swing. Clearly, for large values of ATR is needed and a large stop-loss. Most recommend the use of stop-loss 70% of the indicator ATR. Let’s look at the picture as it is done.
Chart 2
Another method of issuing stop loss — this is a simple technical market analysis. To this end, we define what levels of support or resistance of steel. We can very easily use yesterday’s high (high) or minimum (low) as the boundary of issuing a stop-loss, based on the fact that if the last price in the market is not penetrated this level, you probably will not be able to knock him today. But do not forget to add another 5-10 pips for the insurance, in case a sudden price still goes to yesterday’s high or low and otskochet from him.
Closing of forex strategy «Daily Fozzy Method»:
Because forex strategy «Fozzy Method» is the day, the better option — taking a large profit, but it needs to stay in the market, hoping to continue the trend. In this case, we do not set the final Take-profit.
Therefore our goal — to move the stop loss every day (so as not to let the market take away all our profits in a trend reversal), fixing thereby guaranteed profit as the market movement and let the market itself decides when to withdraw from the transaction. You should install a stop-loss at 70% indicator ATR. On the next trading day if the market is still going in our direction, we move our stop-loss depending on price movements in the market, or fix a portion of the profits, or if it would be appropriate — reduce the size of stop-loss. As a result, we obtain an ideal situation, when we are in the deal and we already have some profit and we can afford to follow the trend without much risk. This concept of trading is called «free floating».
Take a look at Figure 3.
Figure 3
On the price chart shows that the forex indicator gave us a buy signal. We set the safety stop-loss at 70% indicator ATR. This indicator shows the forex trend line, which should be set stop-loss: When you buy at the lower boundary of him, and for sale at its upper limit.
On the next trading day, we move the forex indicator on the position of «b». As you can see, we recorded a small portion of the profits. On the next trading day, we move our stop-loss on the position of «c». The transaction closed on stop-loss on the position of «d».
There is another method of closing the deal — you can leave it on the same day, received their profits as quickly as possible, but also an opportunity supercritical higher profit You are lost.
One should pay attention to the support and resistance levels — they give you the logic levels, indicating the need to move out of the deal.
28 EMA — a very useful moving average, as soon as it comes to daily intervals. It shows good levels of resistance or support, I also can be used as an indicator of the trend. Good target for TP as well Fibonacci extension.
Selection of transactions:
Remember, do not need to trade every day. In fact, outside of the transaction — it’s also a good trading position is the same as the position to buy or sell, because than trade as it is better to simply safe capital. Better to choose the transaction as follows: if a price over the last few months has remained either above or below 28 EMA on the daily chart, we are seeing a good trend.
Therefore it is better to open the deal only on the trend. And that means ignoring the trading signals that go against the trend and wait for the trading signals only on the trend. If you still decide to trade against the trend, then do not expect to get more profit.
Models candles also play a very important role in the transaction, determining if this point of price reversal in the market. If I suddenly saw these pricing models: a hammer, shooting star and they are supported by a signal from the indicators, then I will certainly open up a bargain.
The main task of trading, to conclude lucrative deals — learn how to integrate various aspects of technical analysis in a single trade deal.
Remember that loss — it’s just part of the successful forex trader, but you should always reduce their number by analyzing their own private deals. Once the signal is the signal, especially as only 8 EMA lies flat, then this point it is best to wait out a deal to open a fixed Take-profit.
And certainly do not need to take the trading signals that have emerged in consequence of output is very important forex news. Very often, after the unexpected news in the market price falls like a stone, and gives a lot of trading signals. Watch for the economic calendar FOREX. Personally, I do not recommend to consider such trading signals, the only exception might be — interest rates, how much were they good influence on the foreign exchange market within a few trading days and can start a great trend.
If the signal candle was very big, but you decided to take this trading signal, then do not open a bargain at the opening of the next trading candles. And wait until the price is not rolled back to 23.6 or 38.2 Fibonacci levels, which are installed by the high and low the previous day. This allows you to get the best price in the market and will greatly reduce the amount of stop-loss. Sometimes you can just skip the bargain if the price is not rolled back, but our goal, as is known — to minimize the number of stop-loss and thereby preserve our trading deposit for more lucrative deals.
Final recommendations:
Personally, I recommend not risking more than 3-4% of the capital on the strategy for each transaction. You can trade any currency pair, but it’s better to look at couples who are independent of each other: EURUSD, USDCAD or GBPJPY.
So I recommend to look at this forex strategy at history and determine how generally work out trade signals, to know how best to trade.
