In the forex strategy «Trend-Following», the following forex indicators:
- 3 Exponential Moving Average EMA 21, EMA 55, EMA 200 — for the closing prices (Close) — with their help, we identify a trend and its direction in the market;
- Forex Indicator RSI (13) — indicates the presence of divergences in the market, as well as to determine oversold and overbought, as well as areas for transactions on the sale or purchase price and the breakdown channels.
- The indicator forex ISDA (MACD) — indicates the presence of divergences in the market, as well as to determine areas for sale or for purchase.
- Fibonacci — allow us to determine profit targets.
All of these tools and indicators forex presentedin standard set of trading terminal Metatrader 4.
General conditions for forex strategy «trend-following»:
1. Analyze schedule H4.
If the moving average EMA 200 is directed downward, we have now considered the main Down-trend (falling), if the moving average EMA 200 is directed upwards, we have now considered the main Up-trend (rising). As soon as the market price rises above the exponential moving average EMA 55 and EMA 21 — we will consider the possibility for a deal on the purchase, and 1-I desired profit target — the average EMA 200. As soon as the market price falls below the exponential average EMA55 and EMA21 — we will consider opportunity for a deal to sell a 1-I desired profit target will also be moving average EMA 200.
2. Move on the graph H1.
For transactions of purchase price must be above the moving average EMA 55 and EMA 21. For transactions to sell, the price must be below the moving average EMA 55 and EMA 21.
Additional conditions for the opening of trading transactions:
Transactions on Sell, during H1 — Entrance to bargain on the breakdown of moving average EMA 21 and EMA 55. If there was a divergence of the price is oversold — that these conditions further reinforce the trading signal for the deal to sell and enter into the market can be even after the breakdown of a moving average EMA.
Transactions on Buy, during H1 — Log in trade transaction is carried out on the breakdown of moving average EMA 21 and EMA 55. If there is any divergence of the price is overbought, then this condition significantly enhances the trading signal for the deal to buy and therefore the opportunity to enter the market after the breakdown of a moving average EMA.
A safety Stop Loss and profit target — Take Profit.
Stop Loss order set for the closest at the moment a local maximum or local minimum, or equal to 2% of the value of your trade deposit.
As soon as the market price is 70 — 100 pips — moves Stop Loss order to the region of «zero».
Take Profit order is set to expand and Fibonacci levels.
Once the trend begins to develop — constantly swap the Stop Loss order at the level of the nearest local maximum or local minimum. Also, you can transfer a safety Stop Loss Order at the intersection point moving average EMA (200, 55, 21) and at 00:00 of the trading terminal.
Examples of trade on forex strategy «trend-following»:
Is a simple commercial transaction. Bearish divergence is present, therefore, conclude the deal after the breakdown of a moving average:
Example the length of the transaction: