SYstem TradingAnd here we are again talking about the strategy that withstood the test of time. This commodity trading method is based on the same study of defining support and resistance levels and trading upon the fact of their violation.A trading setup requires only an open chart and no restrictions for the currency or timing preferences.Entry rules: Once the price makes it through the “pivot Line” - dotted white line on the figure below (drawn using the latest price peak) - and closes above (for uptrend) or below (for downtrend) the line buy/sell accordingly.Exit rules: not set. However, exit can be found using Fibonacci method; or traders can measure the distance between point 2 and point 3 and project it on the chart for exit.Additions: as an additional tool traders can use MACD (12, 26, 9). The rules for entry then will be next - let’s take a SELL order:When MACD lines cross downwards, you look for 1-2-3 set-up to form. When the price starts “attacking” the “pivot Line” you check that MACD is still in SELL mode (two lines are heading down). Once the price closes below the “pivot Line” – place Sell order.
Trading System
Can be used in any chart, but I recommend in 4 hours charts1. Moving averages- Exponential moving average of 3 (for my green) - Exponential moving average of 14 (blue) - Exponential moving averages of 28 (red)
All-closure2.
We place an RSI of 14 periods red, with a simple moving average of 7 periods of blue. We place the respective vertical lines of 70, 50 and 30
3. Put one of MACD: -
Period 9 -
Period quick 12 -
Period 26 slower
4. And finally a period of 7 ADX exponentially, so that he can indicate the strength of the pair. Place lines of references in sections 10, 20, 40 and 50
The first indicator that we have to do is the ADX, indicating the strength of buying or selling.
1. Buy when the moving average of 3 periods (green) crosses and 14 (blue) and 28 (red), the RSI crosses its moving average upward, and the MACD signal to buy into this. Wait for the opening of the next sail to enter.
2. Sell when the moving average of 3 periods (green) crosses and 14 Blue and 28 (red), the RSI crosses its moving average to low and the MACD signal in this offering. Wait for the opening of the next sail to enter.
Departures 1.
We must be alert to the candles. When you see a candle significant change in trend, it is sign of Departure.
2. We can also expect the RSI crossing its moving average
3. And if you want to risk more, letting tap the moving average of 3 to any of the other moving averages.
Friday, January 23, 2009
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