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Thread: 200 EMA with RSI as confirmation.

  1. #1
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    200 EMA with RSI as confirmation.

    This strategy is very simple, it requires patience because it is based on the 4 hour time frame
    Before I go into how the system works, here are the settings:

    Moving Average
    Period: 200
    MA method: Exponential
    Apply to: Close

    Relative Strength Index
    Period : 10
    Apply to : Median Price (HL/2)
    Level : 50

    Time Frame USED 15 mins to 4hr

    RULES FOR BUYING
    When price breaks and closes above 200 EMA wait for RSI to touch or cross 50 below and form a V shape, as soon as the V is completed, enter buy at the open of the next candle.

    Stop Loss:
    Previous Swing Low

    RULES FOR SELLING
    When price breaks and closes below 200 EMA wait for RSI to touch or cross above 50 and form an inverted V shape, as soon as the inverted V is completed, enter sell at the open of the next candle

    Stop Loss:
    Previous Swing High

    Risk Reward: 1-1 Minimum
    Below is a chart of eur usd, notice that the V shape that happens after price crossed above the line 50, but I will not buy until price has closed above the 200 EMA as an extra confirmation because I don't want a false buying signal.


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  2. #21
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    Here I have seen a chance to sell GBP CHF, I did not hesitate to pounce on the opportunity, the sell looks quite good, my target profit level is all the way down at 1.2862 this is quite huge because where price is right now is very high on some way, but I am hopeful that this trade will do well so let me hang on.

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  3. #22
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    Gbp chf does not look to me like something that will sell because it is well above the 50 Moving Average which I use to trade, I don't know the parameters that you used to sell, your mistake was selling at a point of support where price was already exhausted and preparing to do a retracement or a reversal, that good thing is your stop loss which has already been triggered if I am correct.

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  4. #23
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    Quote Originally Posted by Ehis View Post
    Gbp chf does not look to me like something that will sell because it is well above the 50 Moving Average which I use to trade, I don't know the parameters that you used to sell, your mistake was selling at a point of support where price was already exhausted and preparing to do a retracement or a reversal, that good thing is your stop loss which has already been triggered if I am correct.
    Well on the contrary this trade is still up and running, my stop loss was not hit as you have assumed here, my stop loss is actually 1.3070 that is a little long term, its a daily time frame set up which I am not in a hurry to close, should the market close me out with my stop loss being activated, then so be it, the trend does not seem to have changed from where I stand, this move that bought it way you is a likely retracement which is no cause for alarm.

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  5. #24
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    Quote Originally Posted by simisola View Post
    Well on the contrary this trade is still up and running, my stop loss was not hit as you have assumed here, my stop loss is actually 1.3070 that is a little long term, its a daily time frame set up which I am not in a hurry to close, should the market close me out with my stop loss being activated, then so be it, the trend does not seem to have changed from where I stand, this move that bought it way you is a likely retracement which is no cause for alarm.
    Price has already crossed the 1.3000 psychological resistance, I have a feeling it might be heading towards 1.3100 but sometimes this pair can be very slow, just like it's counterpart which is usd chf, this is one pair that I hardly look at because of the slowness and erratic behavior most of the time as well.

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  6. #25
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    Thank you for your observations, in this particular trade I will not touch anything, it is either price heads to my take profit or stop loss, I don't want to be hesitant and lose out of what I have already planned in mind, in the forex business, we do that that there are two destinations that our trades can go, this could either be profitable or losing sides, I am willing to wait and see what becomes of this trade.

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  7. #26
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    Everything about this trading system scream about the lg term trading because the 200 ema is an indicator used to measure long term trade and the 4 time frame is also another indication that you trade this style on the long term. I love to follow market direction when i trade the long term and most time the trend is always there if we can be a little patience.if we have a good trading system like this, then we suppose to ride with the market whenever there is one in the market.

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  8. #27
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    Quote Originally Posted by simisola View Post
    Thank you for your observations, in this particular trade I will not touch anything, it is either price heads to my take profit or stop loss, I don't want to be hesitant and lose out of what I have already planned in mind, in the forex business, we do that that there are two destinations that our trades can go, this could either be profitable or losing sides, I am willing to wait and see what becomes of this trade.
    I admire your resolve and determination to stay true to your trading system, that is one of the way that we can use to build discipline and instil on us the need to work out our strategy and follow the rules regardless of whether we will lose the trade or not, doing otherwise might be very bad for us in the long run.

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  9. #28
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    Gbp chf does not have the momentum that will take it up, so your decision to wait seems like it would pay off eventually although it is still too early to judge because of the target that you have in mind, patient is what will reveal the true nature of this trade, you are going to need lots of it here. All the best in your quest.

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  10. #29
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    Price is actually making some good progress to the bear side, it is trading at 1.2915 now which looks like a good price for more bears to jump into the boat, simisola, your target seems to be in range soon if everything goes as planned, GBP USD is also weak which connotes a possible fall more than expected in the coming days.

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  11. #30
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    [lang=ar]I think the price will get a big rise in the coming days because of the tensions between America and China and impose more import tariffs on both countries, which could lead to weakness in the dollar as well as other currencies. Causing the pound to rise against the dollar.[/lang]

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