Monday, February 15

Forex Trading Strategy 1

3 x 21

Conditions required:
1) Moving average 3
2) Moving average 21
3) H1, H4 and D1 charts

As the name suggest, this strategy has something to do with 3 and 21. And the reason being
to set 2 moving average lines as 3(blue line) and 21 (green line). These 2 lines will follow the trend of the market and moves up and down with the market.

Once they cross each other, it gives us the signal to start firing!
As shown in the chart above, the blue line (3) crosses the green line (21) indicating a possible down trend coming. But we cannot confirm that this is actually happening until we see the next bar in the next hour, therefore we need to wait for the confirm bar to come out before firing our trade as there is always a chance that it may go against our direction. Though you may by all means fire if you are confident. :)

Another example is show on the right of the chart indicating an up trend. Are you able to spot without any explanation?

However, to be certain of the trend, you will need to look at the H4 and D1 charts. Generally if the trend is going our way, we can take a 20 to 30 pip profit.

If at this point, you are still unsure of the 3 line and 21 line thingy, no worries. Let me put it this way, imagine a person carrying a 3 kg load versus 21 kg. It is definitely easier to lift up the 3 kg than 21 kg load, therefore indicating up trend when 3 is higher than 21.

On the reverse, it is more difficult to carry 21 kg load over a 3 kg, therefore indicating a down trend.

More examples below. Can you spot the up trends and down trends? The crossovers and confirm?
Blue line = 3
Green line =21

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