This strategy works well on MT4 with time zone GMT+3 during summer time and GMT+2 during winter i.e. market watch is 2hours ahead of London time and for purpose of this document Fxopen MT4 is my reference. As a rule, you have to be a dummy for your system i.e. let the market do all the thinking, let your system tell you long or short and you place the trade without second guessing.
This system takes one thing into consideration: price action and everything one or two things (EMA crossovers and unknown limits) associated with that i.e. no trend-lines, no supports, no resistances, no Fibonacci, no pivots. You might want to ask why? The truth is, my experience so far (3 years) in my trading endeavors, I have found out that News trading, trend-lines, supports and resistances, Fibonacci et al. all need human discretion as to which will hold and which will be broken. So I ditched them all (not that I do not know how to use them, I do, but never for entry and exit.
CAVEAT: If you have this document in your hands, I want to believe that you have learnt all the Forex basics simply because I will use all sort of jargons used in Forex trading. One more thing, any trade placed with the help of this system is at your own risk.
TIME FRAME: 30M
PAIR: GBP/USD
INDICATORS: MACD (5, 13, 5) that can be found in any MT4 trader; MACD_OSMA (5, 13, 5).
Please note that the MACD (5, 13, 5) serves as the 5 and 13 EMA only with a 5-period SMA added to it.
Unknown Limits (UL): +/- 20 pips from open (0:00 hrs on FxOpen MT4).
SL: 30pips, TP: 70pips, Trailing stop 45points.
Maximum Trades per day: 2 trades
1st setup: when European session begins, look for the first 30M bar (setup bar) to close above or below UL. If the bar that closes just before Europe starts satisfies this condition, treat it as a set up bar. If setup bar closes above (below) unknown limit place buy stop (sell stop) 1pip+your brokers spread (1 pip) above (below) the high (low) of set up bar.
Corollary 1: if before European session starts, price has wandered above (below) the UL, we will only be looking to buy (sell) unless 5 and 13 EMA tells us otherwise. Hence, if price is above UL, MACD histogram should be above zero and it is getting farther away from the Signal line. MACD_OSMA should help out with this. The MACD_OSMA should be lime green (do not confuse with dark green). If the bar that closes just before European session satisfies these conditions, then it becomes our setup bar. If the bar does not satisfy this condition, we wait for one to conform. Trades are placed as done in 1st setup.
On the other hand, if price has wandered below UL, we will be looking to sell unless 5 and 13 EMA tells us otherwise. MACD histogram should be below zero and getting farther from the signal line. The MACD_OSMA should be maroon (do not confuse with light red). If the bar that closes just before European session satisfies these conditions, then it becomes our setup bar. If the bar does not satisfy this condition, we wait for one to conform. Trades are placed as done in 1st setup.
Corollary 2: if price had wandered below (above) UL and MACD histogram is above (below) zero. We will be looking to go long (short). Our set up bar must therefore satisfy the requirements (lime green to go long and maroon to go short).
2nd set up: this will only come up if the 1st setup does not yield 70pips i.e. it gets stopped out. If the first trade is a short (long) we will be waiting for the first bar to close with the histogram above (below) Zero line. This bar becomes the set up bar to reverse the initial direction we chose and trades are placed as before.
Corollary 1: if a Short (long) is stopped out MACD_OSMA closes again in maroon (lime green) before histogram gets us into a long (short) trade. We chose this bar as a new setup for another short (long trade) trade.
This system takes one thing into consideration: price action and everything one or two things (EMA crossovers and unknown limits) associated with that i.e. no trend-lines, no supports, no resistances, no Fibonacci, no pivots. You might want to ask why? The truth is, my experience so far (3 years) in my trading endeavors, I have found out that News trading, trend-lines, supports and resistances, Fibonacci et al. all need human discretion as to which will hold and which will be broken. So I ditched them all (not that I do not know how to use them, I do, but never for entry and exit.
CAVEAT: If you have this document in your hands, I want to believe that you have learnt all the Forex basics simply because I will use all sort of jargons used in Forex trading. One more thing, any trade placed with the help of this system is at your own risk.
TIME FRAME: 30M
PAIR: GBP/USD
INDICATORS: MACD (5, 13, 5) that can be found in any MT4 trader; MACD_OSMA (5, 13, 5).
Please note that the MACD (5, 13, 5) serves as the 5 and 13 EMA only with a 5-period SMA added to it.
Unknown Limits (UL): +/- 20 pips from open (0:00 hrs on FxOpen MT4).
SL: 30pips, TP: 70pips, Trailing stop 45points.
Maximum Trades per day: 2 trades
1st setup: when European session begins, look for the first 30M bar (setup bar) to close above or below UL. If the bar that closes just before Europe starts satisfies this condition, treat it as a set up bar. If setup bar closes above (below) unknown limit place buy stop (sell stop) 1pip+your brokers spread (1 pip) above (below) the high (low) of set up bar.
Corollary 1: if before European session starts, price has wandered above (below) the UL, we will only be looking to buy (sell) unless 5 and 13 EMA tells us otherwise. Hence, if price is above UL, MACD histogram should be above zero and it is getting farther away from the Signal line. MACD_OSMA should help out with this. The MACD_OSMA should be lime green (do not confuse with dark green). If the bar that closes just before European session satisfies these conditions, then it becomes our setup bar. If the bar does not satisfy this condition, we wait for one to conform. Trades are placed as done in 1st setup.
On the other hand, if price has wandered below UL, we will be looking to sell unless 5 and 13 EMA tells us otherwise. MACD histogram should be below zero and getting farther from the signal line. The MACD_OSMA should be maroon (do not confuse with light red). If the bar that closes just before European session satisfies these conditions, then it becomes our setup bar. If the bar does not satisfy this condition, we wait for one to conform. Trades are placed as done in 1st setup.
Corollary 2: if price had wandered below (above) UL and MACD histogram is above (below) zero. We will be looking to go long (short). Our set up bar must therefore satisfy the requirements (lime green to go long and maroon to go short).
2nd set up: this will only come up if the 1st setup does not yield 70pips i.e. it gets stopped out. If the first trade is a short (long) we will be waiting for the first bar to close with the histogram above (below) Zero line. This bar becomes the set up bar to reverse the initial direction we chose and trades are placed as before.
Corollary 1: if a Short (long) is stopped out MACD_OSMA closes again in maroon (lime green) before histogram gets us into a long (short) trade. We chose this bar as a new setup for another short (long trade) trade.
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