This strategy is majorly based on a simple trade trending system which has stood the test of time. The strategy entails the combination of the best tools in the Forex market which consists of the Currency strength meter which compares the strength of a particular currency against basket of other currencies. This will help us select the best currency pair to trade each time we have a good set-up in the market.
What many retail traders fail to understand is that the secret of making fortune in the Forex market is by pairing a currency that has the tendency to appreciate with another currency that has the tendency to depreciate. Never pair 2 strong or weak currencies, you will most times get a ranging scenario if you trade this way.
After fishing out the best pair to focus on since we have aboutt 38 currency pairs, we will then check if the direction of the setup is in line with the general trend, which involves multi time frame trend analysis using Moving averages, GG-trend (ADX, Parabolic S.A.R) and SSRC oscillator.
Currency strength meter.
21 Exponential Moving Average.
55 Exponential Moving Average.
GG Trend (customized indicator which comprises of the combination of p.sar and a.d.x).
1. Use C.S.M to derive the currency pair to trade by pairing the strongest and weakest currency. If the base is the strong currency and the quote or counter is the weak currency, then we have a buy signal. But if the base is the weak currency and the quote or counter is the strong currency, then we have a sell signal.
2. For 2nd confirmation of signals, only pick buy trades if 21 EMA crosses 55 EMA upward and pick sell trades if 21 EMA crosses 55 EMA downward on the 1 hour and 4 hours chart.
3. For 3rd confirmation of signals, only pick buy trades if GG-trend customized indicator shows color green from minimum of 15 mins to 4 hours and only pick sell trades if we get a red color from minimum 15 mins to 4 hours.
4. For final confirmation of signals, only pick buy trades if SSRC oscillator indicator has a reading of 0.75 and above, only pick sell trades if it has a reading of -0.75 and below.
Setting Take Profit and Stop Loss:
1. Use weekly pivots or daily pivots to set targets and stop losses.
2. Use a default stop loss of 30 pips and aim 30 pips for take profit 1 and 60 pips for take profit 2.
1.Do not trade if signals comes at extreme pivot levels such as R2/R3 or S2/S3.
2. If you have floating trades and a high impact economic news is about to be released, close trade or lock some profit or set trade to break-even or reduce default stop loss depending on the current situation of the trade.
This system is very simple and requires only 5 to 10 minutes of your time daily. The best time to select your trade is the first 2 hours of the London open session when there’s enough liquidity and volume in the market. This is a set and forget trading approach and can fetch you 30-50% minimum return on investment.