62# Smashing Forex Trading System

Submit By JanusTrader (author Frank Lim)

 

Pairs:all.

Time Frame: 1H and higher

Indicators:

MACD Histogram (3,6,3).

Exponential Moving Average 9-period (EMA50, Purple Color in the

illustrations);

Exponential Moving Average 20-period (EMA20, Blue Color in the

illustrations);

Exponential Moving Average 50-period (EMA50, Green Color in the

illustrations);

Exponential Moving Average 200-period (EMA200, Orange Color in the

illustrations).

 

Rules for Buy Signals (Long Trades):

- We must first establish that we’re currently in a strong uptrend. The

conditions for determining that price is in a strong uptrend are as

follows:

a. Price is above both EMA50 and EMA200

b. EMA50 just crossed EMA200, and is currently above EMA200.

c. MACD value is positive.

- When we already know that we’re in an uptrend, we’ll then wait for

price to pull-back (retrace).

 


When price declines, it makes MACD value decrease and MACD value

eventually becomes negative.

- The trigger is when MACD value turns from negative back to positive.

When that happens, we enter at market price with two lots.

Stop Loss: We place a protective stop loss 1 pip below the Lowest

Price of the Pull-Back (Retracement).

Profit Targets: We have 2 different exit strategies for the 2 lots as

follows:

Exit Strategy 1: We exit the first lot when MACD turns from

positive to negative. At this time, we might also move the stop loss for

the second lot to break-even.

Exit Strategy 2: We exit the second lot when EMA9 cross EMA20 to

the downside.

  • Buy (Long) Trade Example:

Figure 1 - Price is in an uptrend. Price is well above both EMA50 and

EMA200; EMA50 just crossed EMA200, and is currently above EMA200;

and MACD value is positive.

 

 

 

Figure 2 - Price pulls back (retraces). When price declines, it makes MACD value decrease and MACD value eventually becomes negative.

 

Figure 3 - MACD value turns from negative back to positive. When that happens, we enter at market price with two lots

 

 

Figure 4 - We place a protective stop loss 1 pip below the Lowest Price

of the Pull-Back (Retracement).

 

 

Figure 5 - We exit the first lot when MACD turns from positive to negative. At this time, we might also move the stop loss for the second

lot to break-even

.


Figure 6 – We still have one lot in the trade. Price keeps going up. We have more profit 

 

 

Figure 7 - We exit the second lot when EMA9 cross EMA20 to the downside

 

 

 

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Retracement Forex Strategies