Hello everyone, i have also decided to join the league of ever winning traders in the trading journal section of this great forum. The strategy i want to share is what i just started working on and i am currently perfecting the effectiveness of this strategy on a demo trading account.
The strategy comprises of the combination of three (3) indicators which are;
-Two(2) Simple Moving Average(SMA), values 5 & 10;
-Relative Strength Index(RSI), settings--Period=9, level=50;
-Stochastic indicator, settings=14,3,3 and level=20(considered as oversold market) & 80(considered as overbought market).
Time Frame: Daily
Currency Pair: Any Pair
RULES FOR BUYING:
1. Wait for the 5SMA to cross the 10SMA to the upside;
2. Check if the stochastic indicator is in the oversold condition(either below 20 level or just heading above 20 level)
3. Check if RSI indicator is at or above 50 level;
4. If conditions 1-3 are met, place a BUY STOP order at 10 pips above the high of the next candlestick(i.e the daily candlestick after the crossing);
5. Stop loss should be either 100 pips or 80 pips below the low of the previous candlestick(whichever is higher) and the take profit should be either same value (1:1) or double the stop loss value(1:2). Appearance of a counter signal may also be used as the target.
RULES FOR SELLING:
!. Wait for the 5SMA to cross the 10SMA to the downside;
2. Check if the Stochastic indicator is in the overbought condition(either above 80 level or just heading below 80 level);
3. Check if RSI indicator is at or above 50 level;
4. Place a SELL STOP order at 10 pips below the low of the next candlestick(i.e the daily candlestick after the crossing);
5. Stop loss should be either 100 pips or 80 pips above the high of the previous candlestick(whichever is higher) and same apply as in the buy rule for targets(1:1 or 1:2)
See the chart below for a trade taken today on USDCAD.